Earnings-Based Anomaly, Accrual-Based Anomaly and the Relationship between Them

Earnings-based anomaly, known as post-earnings announcement drift, could be regarded as delayed price response to earnings information that results in earning abnormal returns. The accrual anomaly refers to the fact that the current level of accruals is negatively related to abnormal returns over th...

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Autores principales:	Gholamreza Karami, Mahnaz Morshedzadeh Bafghi
Formato:	article
Lenguaje:	FA
Publicado:	Shahid Bahonar University of Kerman 2015
Materias:	abnormal returns earnings based anomaly accrual based anomaly acc hedge portfolio sue hedge portfolio Accounting. Bookkeeping HF5601-5689
Acceso en línea:	https://doaj.org/article/29eceabd7da34ce89f39baf38aa5b5ca
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spelling	oai:doaj.org-article:29eceabd7da34ce89f39baf38aa5b5ca2021-11-04T19:47:29ZEarnings-Based Anomaly, Accrual-Based Anomaly and the Relationship between Them2008-89142476-292X10.22103/jak.2015.882https://doaj.org/article/29eceabd7da34ce89f39baf38aa5b5ca2015-03-01T00:00:00Zhttps://jak.uk.ac.ir/article_882_d331117fc8a2c0cc63f883bfabeac1dc.pdfhttps://doaj.org/toc/2008-8914https://doaj.org/toc/2476-292XEarnings-based anomaly, known as post-earnings announcement drift, could be regarded as delayed price response to earnings information that results in earning abnormal returns. The accrual anomaly refers to the fact that the current level of accruals is negatively related to abnormal returns over the following year, which may result in earning abnormal returns. These two anomalies appear to be related closely in the sense that accruals could be regarded as the primary component contributing to earnings. The aim of this study is to examine these two anomalies in the Iranian capital market, and to explain the relationship between them. In this study a sample of 560 firm-years from the Tehran Stock Exchange in the period of 1388-1391 has been considered. The results show that earnings-based anomaly is different from accrual anomaly. Also, a hedge portfolio trading strategy that takes both forms of market mispricing, generates abnormal returns higher than those based on only unexpected earnings or accruals informationGholamreza KaramiMahnaz Morshedzadeh BafghiShahid Bahonar University of Kermanarticleabnormal returnsearnings based anomalyaccrual based anomalyacc hedge portfoliosue hedge portfolioAccounting. BookkeepingHF5601-5689FAمجله دانش حسابداری, Vol 5, Iss 19, Pp 7-26 (2015)
institution	DOAJ
collection	DOAJ
language	FA
topic	abnormal returns earnings based anomaly accrual based anomaly acc hedge portfolio sue hedge portfolio Accounting. Bookkeeping HF5601-5689
spellingShingle	abnormal returns earnings based anomaly accrual based anomaly acc hedge portfolio sue hedge portfolio Accounting. Bookkeeping HF5601-5689 Gholamreza Karami Mahnaz Morshedzadeh Bafghi Earnings-Based Anomaly, Accrual-Based Anomaly and the Relationship between Them
description	Earnings-based anomaly, known as post-earnings announcement drift, could be regarded as delayed price response to earnings information that results in earning abnormal returns. The accrual anomaly refers to the fact that the current level of accruals is negatively related to abnormal returns over the following year, which may result in earning abnormal returns. These two anomalies appear to be related closely in the sense that accruals could be regarded as the primary component contributing to earnings. The aim of this study is to examine these two anomalies in the Iranian capital market, and to explain the relationship between them. In this study a sample of 560 firm-years from the Tehran Stock Exchange in the period of 1388-1391 has been considered. The results show that earnings-based anomaly is different from accrual anomaly. Also, a hedge portfolio trading strategy that takes both forms of market mispricing, generates abnormal returns higher than those based on only unexpected earnings or accruals information
format	article
author	Gholamreza Karami Mahnaz Morshedzadeh Bafghi
author_facet	Gholamreza Karami Mahnaz Morshedzadeh Bafghi
author_sort	Gholamreza Karami
title	Earnings-Based Anomaly, Accrual-Based Anomaly and the Relationship between Them
title_short	Earnings-Based Anomaly, Accrual-Based Anomaly and the Relationship between Them
title_full	Earnings-Based Anomaly, Accrual-Based Anomaly and the Relationship between Them
title_fullStr	Earnings-Based Anomaly, Accrual-Based Anomaly and the Relationship between Them
title_full_unstemmed	Earnings-Based Anomaly, Accrual-Based Anomaly and the Relationship between Them
title_sort	earnings-based anomaly, accrual-based anomaly and the relationship between them
publisher	Shahid Bahonar University of Kerman
publishDate	2015
url	https://doaj.org/article/29eceabd7da34ce89f39baf38aa5b5ca
work_keys_str_mv	AT gholamrezakarami earningsbasedanomalyaccrualbasedanomalyandtherelationshipbetweenthem AT mahnazmorshedzadehbafghi earningsbasedanomalyaccrualbasedanomalyandtherelationshipbetweenthem
_version_	1718444579825385472

Earnings-Based Anomaly, Accrual-Based Anomaly and the Relationship between Them

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