Earnings |
EARN |
Income before extraordinary items standardized by the market value of equity |
Basu (1997Basu, S. (1997). The conservatism principle and the asymmetric timeliness of earnings. Journal of Accounting and Economics, Properties of Accounting Earnings, 24(1), 3-37. https://doi.org/10.1016/S0165-4101(97)00014-1 https://doi.org/10.1016/S0165-4101(97)00...
) |
Stock returns |
RET |
Stock return of the last nine months of year t and the first three months of the following year |
Basu (1997Basu, S. (1997). The conservatism principle and the asymmetric timeliness of earnings. Journal of Accounting and Economics, Properties of Accounting Earnings, 24(1), 3-37. https://doi.org/10.1016/S0165-4101(97)00014-1 https://doi.org/10.1016/S0165-4101(97)00...
) |
Dummy for negative stock returns |
NEG |
Categorical variable that assumes a value of 1 when Ret is negative and 0 otherwise |
Basu (1997Basu, S. (1997). The conservatism principle and the asymmetric timeliness of earnings. Journal of Accounting and Economics, Properties of Accounting Earnings, 24(1), 3-37. https://doi.org/10.1016/S0165-4101(97)00014-1 https://doi.org/10.1016/S0165-4101(97)00...
) |
Net income variation |
ΔNI |
Change in earnings from year t-1 to year t, standardized by total assets at end of year t-1 |
Ball and Shivakumar (2005Ball, R., & Shivakumar, L. (2005). Earnings quality in UK private firms: Comparative loss recognition timeliness. Journal of Accounting and Economics, 39(1), 83-128. https://doi.org/10.1016/j.jacceco.2004.04.001 https://doi.org/10.1016/j.jacceco.2004.0...
), Basu (1997Basu, S. (1997). The conservatism principle and the asymmetric timeliness of earnings. Journal of Accounting and Economics, Properties of Accounting Earnings, 24(1), 3-37. https://doi.org/10.1016/S0165-4101(97)00014-1 https://doi.org/10.1016/S0165-4101(97)00...
) |
Dummy for negative net income variation |
DΔNI |
Categorical variable that assumes value 1 when ΔNI is negative and 0 otherwise |
Ball and Shivakumar (2005Ball, R., & Shivakumar, L. (2005). Earnings quality in UK private firms: Comparative loss recognition timeliness. Journal of Accounting and Economics, 39(1), 83-128. https://doi.org/10.1016/j.jacceco.2004.04.001 https://doi.org/10.1016/j.jacceco.2004.0...
), Basu (1997Basu, S. (1997). The conservatism principle and the asymmetric timeliness of earnings. Journal of Accounting and Economics, Properties of Accounting Earnings, 24(1), 3-37. https://doi.org/10.1016/S0165-4101(97)00014-1 https://doi.org/10.1016/S0165-4101(97)00...
) |
Tax aggressiveness |
AGGR |
(Total tax expense on profit/profit before tax) × (-1) |
Chiachio and Martinez (2019Chiachio, V. F. O., & Martinez, A. L. (2019). Efeitos do modelo de Fleuriet e índices de liquidez na agressividade tributária. Revista de Administração Contemporânea, 23(2), 160-181. https://doi.org/10.1590/1982-7849rac2019180234 https://doi.org/10.1590/1982-7849rac2019...
) |
Tax aggressiveness |
AGGR |
Average ETR in the previous five years multiplied by -1 |
Chiachio and Martinez (2019Chiachio, V. F. O., & Martinez, A. L. (2019). Efeitos do modelo de Fleuriet e índices de liquidez na agressividade tributária. Revista de Administração Contemporânea, 23(2), 160-181. https://doi.org/10.1590/1982-7849rac2019180234 https://doi.org/10.1590/1982-7849rac2019...
) |
Size |
SIZE |
Natural logarithm of the market value of equity |
Khan and Watts (2009Khan, M., & Watts, R. L. (2009). Estimation and empirical properties of a firm-year measure of accounting conservatism. Journal of Accounting and Economics, 48(2-3), 132-150. https://doi.org/10.1016/j.jacceco.2009.08.002 https://doi.org/10.1016/j.jacceco.2009.0...
) |
Market-to-book |
MTB |
Market value of equity divided by the book value of equity |
Khan and Watts (2009Khan, M., & Watts, R. L. (2009). Estimation and empirical properties of a firm-year measure of accounting conservatism. Journal of Accounting and Economics, 48(2-3), 132-150. https://doi.org/10.1016/j.jacceco.2009.08.002 https://doi.org/10.1016/j.jacceco.2009.0...
) |
Leverage |
LEV |
Debt divided by market value of equity |
Khan and Watts (2009Khan, M., & Watts, R. L. (2009). Estimation and empirical properties of a firm-year measure of accounting conservatism. Journal of Accounting and Economics, 48(2-3), 132-150. https://doi.org/10.1016/j.jacceco.2009.08.002 https://doi.org/10.1016/j.jacceco.2009.0...
) |