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Accurals Quality And Price Synchronicity, Joseph Atkins Johnston
Accurals Quality And Price Synchronicity, Joseph Atkins Johnston
LSU Doctoral Dissertations
This study examines the relation between accruals quality and price synchronicity, a measure of the relative amount of firm-specific information reflected in price. Higher accruals quality imply better quality earnings news, hence, more firm-specific information is incorporated into price for firms with higher accruals quality. More firm-specific information reduces price synchronicity, hence, we hypothesize a negative relation between accruals quality and price synchronicity. On the other hand, literature shows that accruals quality reduces idiosyncratic volatility which tends to be negatively correlated with price synchronicity. If the latter effects dominate the relation between accruals quality and price synchronicity, we should observe …