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DACCR;| is the absolute value of discretionary accruals of firm i in year t under Modified Jones model (Dechow et al. 1995). In_Sm is the ratio of the standard deviation of earnings to cash flow from operations of firm. Ke is the cost of equity of firm i in year ¢t measured by Easton (2004) model. GROUP is 1 for a firm that belongs to a business group, 0 for a firm that is in a non-business group in year t. Top_4 is 1 for Top 4 client firms, 0 for non-Top 4 client firms in year t. Ln_Fees is the natural logarithm of audit fees of firm i in year ¢. Ln_Assets is natural logarithm of total assets of firm i in year ¢. F_Lev is the ratio of total debt to total assets of firm i in year ¢. ROA is the net income before extraordinary items for a firm i in year ft scaled by total assets. L_Loss takes the value of 1 if firm i in year ¢ and t-/reports negative income before extraordinary items and 0 if otherwise. VOLATILITY is a measure of a stock's average annual price movement to a high and low from a mean price for each year. Panel A: Descriptive statistics for DACCR, In_Sm & Ke sample (n=7,308)

Table 3 DACCR;| is the absolute value of discretionary accruals of firm i in year t under Modified Jones model (Dechow et al. 1995). In_Sm is the ratio of the standard deviation of earnings to cash flow from operations of firm. Ke is the cost of equity of firm i in year ¢t measured by Easton (2004) model. GROUP is 1 for a firm that belongs to a business group, 0 for a firm that is in a non-business group in year t. Top_4 is 1 for Top 4 client firms, 0 for non-Top 4 client firms in year t. Ln_Fees is the natural logarithm of audit fees of firm i in year ¢. Ln_Assets is natural logarithm of total assets of firm i in year ¢. F_Lev is the ratio of total debt to total assets of firm i in year ¢. ROA is the net income before extraordinary items for a firm i in year ft scaled by total assets. L_Loss takes the value of 1 if firm i in year ¢ and t-/reports negative income before extraordinary items and 0 if otherwise. VOLATILITY is a measure of a stock's average annual price movement to a high and low from a mean price for each year. Panel A: Descriptive statistics for DACCR, In_Sm & Ke sample (n=7,308)

Related Figures (7)

Panel A explains the sample selection process. Panel B reports the sample composition by year. Panel C reports industry distribution of the sample. Industry groups are based on the industry classification benchmark (ICB) universe. Panel C: Sample composition by industry
Panel A explains the sample selection process. Panel B reports the sample composition by year. Panel C reports industry distribution of the sample. Industry groups are based on the industry classification benchmark (ICB) universe. Panel C: Sample composition by industry
Correlation among the Dependent variables (|DACCR|, In_Sm, Ke) and selected variables |DACCR;| is the absolute value of discretionary accruals of firm i in year t according to the modified Jones model (Dechow et al. 1995). In_Sm is the ratio of the standard deviation of earnings to cash flow from operations of firm. Ke is the cost of equity capital using the modified PEG approach (Easton 2004). GROUP is 1 for a firm that belongs to a business group, 0 for a firm that is a non-business group in year ft. Top_4 is 1 for Top 4 client firms, 0 for non-Top 4 client firms in year ¢. Ln_Fees is the natural logarithm of audit fees of firm iin year f. Table 3
Correlation among the Dependent variables (|DACCR|, In_Sm, Ke) and selected variables |DACCR;| is the absolute value of discretionary accruals of firm i in year t according to the modified Jones model (Dechow et al. 1995). In_Sm is the ratio of the standard deviation of earnings to cash flow from operations of firm. Ke is the cost of equity capital using the modified PEG approach (Easton 2004). GROUP is 1 for a firm that belongs to a business group, 0 for a firm that is a non-business group in year ft. Top_4 is 1 for Top 4 client firms, 0 for non-Top 4 client firms in year ¢. Ln_Fees is the natural logarithm of audit fees of firm iin year f. Table 3
|DACCR;,| is the absolute discretionary accruals of firm i in year t under the modified Jones model (Dechow et al. 1995). In_Sm is the ratio of the standard deviation of earnings to cash flow from operations of firm. GROUP is | for a firm that belongs to a business group, O for a firm that is in a non-business group in year t. Top_4 is 1 for Top 4 client firms, 0 for non-Top 4 client firms in year t. Ln_Fees is the natural logarithm of audit fees of firm i in year t. Ln_Assets is natural logarithm of total assets of firm iin year t. F_Lev is the ratio of total debt to total assets of firm i in year ¢t. ROA is the net income before extraordinary items for a firm i in year ¢ scaled by total assets. L_Loss takes the value of | if firm i in year ¢ and t-/reports negative income before extraordinary items and 0 if otherwise. Year dummies, a vector of dummy variables, indicate year. Industry dummies, a vector of dummy variables, indicate industry sector membership.
|DACCR;,| is the absolute discretionary accruals of firm i in year t under the modified Jones model (Dechow et al. 1995). In_Sm is the ratio of the standard deviation of earnings to cash flow from operations of firm. GROUP is | for a firm that belongs to a business group, O for a firm that is in a non-business group in year t. Top_4 is 1 for Top 4 client firms, 0 for non-Top 4 client firms in year t. Ln_Fees is the natural logarithm of audit fees of firm i in year t. Ln_Assets is natural logarithm of total assets of firm iin year t. F_Lev is the ratio of total debt to total assets of firm i in year ¢t. ROA is the net income before extraordinary items for a firm i in year ¢ scaled by total assets. L_Loss takes the value of | if firm i in year ¢ and t-/reports negative income before extraordinary items and 0 if otherwise. Year dummies, a vector of dummy variables, indicate year. Industry dummies, a vector of dummy variables, indicate industry sector membership.
Note: p-values are in parentheses.
Note: p-values are in parentheses.
|DACCR;| is the absolute discretionary accruals of firm i in year ¢ under the modified Jones model (Dechow et al. 1995). In_Sm is the ratio of the standard deviation of earnings to cash flow from operations of firm. GROUP is | for a firm that belongs to a business group, 0 for a firm that is in a non-business group in year t. Top_4 is 1 for Top 4 client firms, 0 for non-Top 4 client firms in year t. Ln_Fees is the natural logarithm of audit fees of firm i in year t. Ln_Assets is natural logarithm of total assets of firm i in year t. F_Lev is the ratio of total debt to total assets of firm i in year t. ROA is the net income before extraordinary items for a firm i in year ¢ scaled by total assets. L_Loss takes the value of | if firm i in year t¢ and t-/reports negative income before extraordinary items and 0 if otherwise. Year dummies, a vector of dummy variables, indicate year. Industry dummies, a vector of dummy variables, indicate industry sector membership.
|DACCR;| is the absolute discretionary accruals of firm i in year ¢ under the modified Jones model (Dechow et al. 1995). In_Sm is the ratio of the standard deviation of earnings to cash flow from operations of firm. GROUP is | for a firm that belongs to a business group, 0 for a firm that is in a non-business group in year t. Top_4 is 1 for Top 4 client firms, 0 for non-Top 4 client firms in year t. Ln_Fees is the natural logarithm of audit fees of firm i in year t. Ln_Assets is natural logarithm of total assets of firm i in year t. F_Lev is the ratio of total debt to total assets of firm i in year t. ROA is the net income before extraordinary items for a firm i in year ¢ scaled by total assets. L_Loss takes the value of | if firm i in year t¢ and t-/reports negative income before extraordinary items and 0 if otherwise. Year dummies, a vector of dummy variables, indicate year. Industry dummies, a vector of dummy variables, indicate industry sector membership.
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BusinessEarnings ManagementTextEarnings qualityAudit QualityCost of equity capitalCorporate SectorIncome SmoothingVictoria University of WellingtonEquity Law
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