Income Smoothing, Earnings Quality and Firm Valuation
发现盈余平滑本身不保证公司价值更高，只有高质量的平滑才提升盈余的价值相关性，质量平滑组的市盈率最高。
Abstract: This study argues that lower variability of earnings does not guarantee income smoothers’ higher firm values. Instead, smoothers’ earnings should be more value‐relevant if they are of high quality, i.e., earnings quality should be considered simultaneously. Sample firms are divided into four groups: quality earnings smoothers, quality earnings non‐smoothers, non‐quality earnings smoothers, and non‐quality earnings non‐smoothers. Value relevance of reported earnings is then studied using both the levels and the changes approaches with indicator variables. Results show quality earnings smoothers have the highest price‐earnings multiple while non‐quality non‐smoothers have the lowest price‐earnings multiple.