Accounting Conservatism, Earnings Persistence, and Pricing Multiples on Earnings

We examine the effect of accounting conservatism on earnings persistence and the stock market's valuation of earnings. Using a sample of U.S. companies during the period of 1988-2010, we find that firms with more conservative accounting generate less persistent earnings than firms with less conserva...

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Journal Title: Accounting Horizons Vol. 28; no. 2
Authors: Lucy Huajing Chen, Heibatollah Sami, Wonsun Paek, David M Folsom
Format: Article
Language: English
Published: June 2014