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Opaque financial reports and R2: Revisited
dc.contributor.authorDatta, Sudip
dc.contributor.authorIskandar‐datta, Mai
dc.contributor.authorSingh, Vivek
dc.date.accessioned2018-02-05T16:40:51Z
dc.date.available2018-02-05T16:40:51Z
dc.date.issued2014-01
dc.identifier.citationDatta, Sudip; Iskandar‐datta, Mai ; Singh, Vivek (2014). "Opaque financial reports and R2: Revisited." Review of Financial Economics 23(1): 10-17.
dc.identifier.issn1058-3300
dc.identifier.issn1873-5924
dc.identifier.urihttps://hdl.handle.net/2027.42/141808
dc.description.abstractIn this study, we revisit the link between R2 (synchronicity) and earnings management (opacity) because of the importance of the ongoing debate on the relation between idiosyncratic risk and earnings management in the finance and accounting literatures. Hutton et al. (J. Financial Economics, 2009) provide evidence of a positive link between opacity and R2. They interpret their finding to imply that firms with high R2 (high synchronicity) have less firmâ specific information impounded in their stock price. Our results for this relationship fail to unequivocally support the results reported in Hutton et al. (2009). We show that their results are not only time variant but also not robust to the alternative empirical technique recommended for panel data by Petersen (2009) and alternative estimation of discretionary accruals adjusted for firm performance prescribed by Kothari et al. (2005). We also find no support for a convex relation between idiosyncratic risk and opacity. The findings documented in this study substantially revise some of Hutton et al.’s findings in this important and growing area of research.
dc.publisherMassachusetts Institute of Technology
dc.publisherWiley Periodicals, Inc.
dc.subject.otherG19
dc.subject.otherM41
dc.subject.otherR2
dc.subject.otherOpacity
dc.subject.otherEarnings management
dc.subject.otherDiscretionary accruals estimation
dc.subject.otherC1
dc.subject.otherD89
dc.titleOpaque financial reports and R2: Revisited
dc.typeArticleen_US
dc.rights.robotsIndexNoFollow
dc.subject.hlbsecondlevelEconomics
dc.subject.hlbtoplevelSocial Sciences
dc.description.peerreviewedPeer Reviewed
dc.contributor.affiliationumDepartment of Finance and Accounting, College of Business, University of Michiganâ Dearborn, Dearborn, MI 48126, USA
dc.contributor.affiliationotherDepartment of Finance, School of Business Administration, Wayne State University, 5201 Cass Avenue, Detroit, MI 48202, USA
dc.description.bitstreamurlhttps://deepblue.lib.umich.edu/bitstream/2027.42/141808/1/rfe10.pdf
dc.identifier.doi10.1016/j.rfe.2013.08.001
dc.identifier.sourceReview of Financial Economics
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dc.owningcollnameInterdisciplinary and Peer-Reviewed


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