Does Income Smoothing Improve Earnings Informativeness?
用新方法检验收入平滑是扭曲还是改善了盈余信息，发现高平滑公司的股价变化包含更多关于未来盈余的信息。
This paper uses a new approach to examine whether income smoothing garbles earnings information or improves the informativeness of past and current earnings about future earnings and cash flows. We measure income smoothing by the negative correlation of a firm's change in discretionary accruals with its change in premanaged earnings. Using the approach of Collins et al. (1994), we find that the change in the current stock price of higher-smoothing firms contains more information about their future earnings than does the change in the stock price of lower-smoothing firms. This result is robust to decomposing earnings into cash flows and accruals and to controlling for firm size, growth, future earnings variability, private information search activities, and cross-sectional correlations.