Disclosure Quality and Mispricing of Accruals and Cash Flows

When investors expect future profits you're the corporate form,
the accruals more persistence cash flow forecasts, and consequently the stock price will incorrectly. Disclosure of information to analysts and investors and will increase the accuracy of its predictions. Thus helps to fully understand information Disclosure with higher quality accruals and cash flow and the expected impact on earnings components mispricing. Investigate the relationship between disclosure quality and incorrect pricing of accruals and cash flow is important because the quality of disclosure to help investors understand the true highlight for the accounting information relative to prices; Therefore between disclosure quality and market performance relationship is formed. Thus is expected the stock price higher disclosure quality firms in comparison with lower disclosure quality, persistence accruals (cash flow) to reflect more with accuracy. For the purpose of this study was to investigate, about 82 companies listed securities during the years 1382 to 1388 analyses was used. For application multiple regression methods using panel data indicate that investors underestimate the persistence of accruals and overestimate the persistence of cash flow. The behavior of investors causing shares to be priced incorrectly. Therefore, incorrect pricing of earnings components reduced in firms with higher disclosure quality.