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Table 4 Earnings and its components/Dutch companies ACCit/At−1 = α1i 1/At−1 + α2i (REVt − RECt)/At−1 + α3i PPEt/At−1 + εit

From: The detection of earnings management through a decrease of corporate income tax

  Coefficient Mean 25% Median 75%
NI Estimated α1i 0.0698 −0.6190 0.0699 0.4260
t-statistic   0.1051 −0.6160 0.1091 0.9290
Estimated α2i −0.0376 −0.8770 −0.0449 0.7560
t-statistic   −0.0096 −0.8010 −0.0074 0.5759
Estimated α3i −0.0280 −0.2800 −0.0307 0.2001
t-statistic   0.0795 −0.4600 0.0752 0.8500
Adjusted R2   0.2888 0.0888 0.287 0.3199
Durbin–Watson stat   2.1206 1.1206 2.1206 2.9206
  1. Source: Author work
  2. Total accrual (ACCR) is computed as follows: ACCR = Δ current assets − Δ current liabilities − Δ cash and equivalent + Δ short term debt and current portion of long-term debt + ΔIncome taxes payable depreciations, depletion and amortization