Articlegreen2003

The Influence of Interim Auditor Reviews on the Association of Returns with Earnings

David L. Manry · Samuel L. Tiras · Clark M. Wheatley

75 citations0/0 files storedThe Accounting Review

No readable copy stored yet — this record is metadata only.

No open-access location is known for this record yet.

Literature note Cite in a project Citation map

Auditing, Earnings Management, Governance Financial Markets and Investment Strategies Corporate Governance and Financial Management

Abstract

The Securities and Exchange Commission now requires auditors to review interim earnings reports on a timely basis. Previously, auditors could perform this review retrospectively, as part of the year-end audit. We investigate whether timely reviews are likely to increase the relevance and reliability of reported earnings, as reflected by the extent to which the earnings-return relation is contemporaneous. We find that when the auditor reviews interim earnings on a timely basis, the association between quarterly returns and earnings (and between quarterly returns and unexpected earnings) is predominantly contemporaneous. When the auditor reviews interim earnings retrospectively, however, the association between quarterly returns and earnings is not entirely contemporaneous; with retrospective reviews, returns lead interim earnings. We conclude from these findings that timely reviews increase the likelihood that accounting earnings reflect economic events contemporaneously with returns.

Paper brief

Loading…

Cite this work

Citation unavailable for this work.

BibTeX RIS CSL-JSON

No public copy is stored for this record, so only the metadata is cited.

Citations in this library

Citation map →

Stored only when both papers are in the corpus — 75 citations exist upstream.

References

1985Positive Accounting Theory 1994Accounting earnings and cash flows as measures of firm performance 1991Earnings Asan Explanatory Variable for Returns 1992A Nonlinear Model of Security Price Responses to Unexpected Earnings 1992Aggregate accounting earnings can explain most of security returns 1992The Role of Earnings Levels in Annual Earnings-Returns Studies 1988Bad News and Differential Market Reactions to Announcements of Earlier-Quarters Versus Fourth-Quarter Earnings 1992Changes versus Levels in Earnings As Explanatory Variables for Returns: Some Theoretical Considerations

Cited by

2007The Influence of Forecast Dispersion on the Incremental Explanatory Power of Earnings, Book Value, and Analyst Forecasts on Market Prices 2005Auditor Litigation Risk and Corporate Disclosure of Quarterly Review Report 2014Audit committee accounting expertise, expectations management, and nonnegative earnings surprises 2008The Economic Consequence of Voluntary Auditing 2012Auditor Attestation under SOX Section 404 and Earnings Informativeness

Explore the map →

Papers that cite the same references — the relational fallback while embeddings are still backfilling.

Imported from OpenAlex (CC0) — nothing here is generated.