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Smoothing Earnings and Earnings Informativenes

Author

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  • Svetoslav Velinov Borisov

    (Department of Finance, University of Economics – Varna, Bulgaria)

Abstract

The impact of smoothing earnings over earnings informativeness depends on the reasons for practising it on the part of company management. If smoothing earnings is done for opportunistic purposes, it is expected to reduce earnings informativeness. In contrast, if by means of smoothing earnings the management targets the transmission of internal information about future corporate results, it is expected to increase informativeness. By applying the approach of informativeness following the example of Tucker and Zarowin (2006), this survey examines how smoothing earnings influences earnings informativeness across a sample of Bulgarian public companies.

Suggested Citation

  • Svetoslav Velinov Borisov, 2017. "Smoothing Earnings and Earnings Informativenes," Business & Management Compass, University of Economics Varna, issue 3, pages 222-235.
    • Handle: RePEc:vrn:journl:y:2017:i:3:p:222-235
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    More about this item

    Keywords

    smoothing earnings; informativeness; CKSS approach;
    All these keywords.

    JEL classification:

    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading

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