Journal article
Does managerial sentiment affect accrual estimates ? Evidence from the banking industry
Journal of accounting & economics, Vol.63(1), pp.26-50
02/01/2017
DOI: 10.1016/j.jacceco.2016.10.001
Abstract
We examine whether managerial sentiment is associated with errors in accrual estimates. Using public banks we find (1) managerial sentiment is negatively associated with loan loss provision estimates, (2) future charge-offs per dollar of provision are positively associated with sentiment when the provision is estimated, and (3) the effects of sentiment are greater for firms with more uncertain charge-offs. Results are similar for private banks, suggesting accrual manipulation related to capital market incentives is unlikely to explain the results. Although economic fundamentals explain most of the variation in the provision, we find sentiment has an incremental and economically meaningful effect. (C) 2016 Elsevier B.V. All rights reserved.
Details
- Title: Subtitle
- Does managerial sentiment affect accrual estimates ? Evidence from the banking industry
- Creators
- Paul Hribar - University of IowaSamuel J. Melessa - University of IowaR. Christopher Small - University of TorontoJaron H. Wilde - University of Iowa
- Resource Type
- Journal article
- Publication Details
- Journal of accounting & economics, Vol.63(1), pp.26-50
- Publisher
- Elsevier
- DOI
- 10.1016/j.jacceco.2016.10.001
- ISSN
- 0165-4101
- eISSN
- 1879-1980
- Number of pages
- 25
- Grant note
- Tippie College of Business, University of Iowa
- Language
- English
- Date published
- 02/01/2017
- Academic Unit
- Accounting
- Record Identifier
- 9984380421302771
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