EVIDENCE OF ACCRUALS ANOMALY AROUND THE GLOBE


                Diana Mureşan, Babeş-Bolyai University of Cluj-Napoca, Romania


ABSTRACT: This paper reviews the empirical researchon accruals anomaly around the
globe.Accruals anomaly is defined as the negative relation between accruals and future stock returns.
Starting with Sloan (1996) many papers have documented and confirmed the existence of accruals
anomaly in US capital market. Though, recent papers started to examine the existence of accruals
anomaly outside the US.Overall, empirical results suggest that accruals anomaly is a global
phenomenonpresent in developed countries with large companies and where an accruals accounting
system exists. The approach adopted is a survey of the literature of accruals anomaly conducted on
other samples than US companies. This review splits the discussion in three key topics: (1) empirical
evidence from single country studies, (2) empirical evidencefrom comparative countries studies and
(3) empirical evidencefrom US studies. This comparative discussion highlights the important
challenges generatedbythe accruals anomaly in a global capital market. As a policy implication,
investors from all over the globe should enhance their understanding of accruals information as
accruals anomalyis a pervasive anomaly encountered in many capital markets.

Keywords: accruals, accruals anomaly, global capital market, accrual accounting

JEL Code: M41