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dc.contributor.advisorTse, Senyo Y.en_US
dc.creatorKeskek, Samien_US
dc.date.accessioned2012-10-19T15:28:48Zen_US
dc.date.accessioned2012-10-22T17:58:30Z
dc.date.available2012-10-19T15:28:48Zen_US
dc.date.available2012-10-22T17:58:30Z
dc.date.created2011-08en_US
dc.date.issued2012-10-19en_US
dc.date.submittedAugust 2011en_US
dc.identifier.urihttp://hdl.handle.net/1969.1/ETD-TAMU-2011-08-9835en_US
dc.description.abstractThis study investigates whether market learning explains the absence of the accrual anomaly in recent years by examining three conditions associated with the presence of the anomaly in prior research: (i) a differential relation between future earnings and cash flows versus accruals, (ii) incorrect weighting of cash flows and accruals by investors when predicting earnings, and (iii) association of earnings forecast errors with returns. All of these conditions are widely documented in the anomaly period. In the no-anomaly period, I continue to find a differential relation of cash flows and accruals with future earnings. However, investors appear to correctly weight accruals and cash flows in their earnings predictions implicit in beginning-of-year security prices, consistent with learning. This study also investigates whether improvements in analyst forecasts contribute to investor learning and the absence of the anomaly. The association between analyst optimism and accruals is weaker in the no-anomaly period, but is still statistically significant. Furthermore, the anomaly ended simultaneously for firms followed by analysts and for non-followed firms, suggesting that improvements in analyst forecasts alone cannot account for improved market efficiency with respect to accruals. The results suggest that the anomaly was similar for firms held by institutional investors and for firms with no institutional holdings before the discovery of the anomaly while the anomaly ended sooner for held firms than for non-held firms after the discovery of the anomaly, consistent with the conjecture that arbitrage by institutional investors reduce the anomaly. Overall, the findings are consistent with market learning and suggest that improvement in investors' interpretation of accruals after the discovery of the anomaly explains the end of the anomaly. This improvement in investor learning is not due to changes in analysts' forecasting behavior, however.en_US
dc.format.mimetypeapplication/pdfen_US
dc.language.isoen_USen_US
dc.subjectMarket efficiencyen_US
dc.subjectaccrual anomalyen_US
dc.subjectinvestor sophisticationen_US
dc.subjectanalysts’ forecast biasen_US
dc.titleDoes Market Learning Explain the Disappearance of the Accrual Anomaly?en_US
dc.typeThesisen
thesis.degree.departmentAccountingen_US
thesis.degree.disciplineAccountingen_US
thesis.degree.grantorTexas A&M Universityen_US
thesis.degree.nameDoctor of Philosophyen_US
thesis.degree.levelDoctoralen_US
dc.contributor.committeeMemberAhmed, Anweren_US
dc.contributor.committeeMemberWolfe, Christopheren_US
dc.contributor.committeeMemberLee, D. Scotten_US
dc.type.genrethesisen_US
dc.type.materialtexten_US


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