Abstract
Although bonds account for the largest trading volume of transactions in the Brazilian financial market, most studies of the quality of accounting information focus on the stock market. Considering that many studies suggest that the institutional and organizational environment affects firms’ accounting numbers, the following research question can be raised: Is the quality of accounting information affected significantly by public offering of stocks and bonds? To answer this question, we conducted an empirical study of a sample composed of listed Brazilian companies that made public debt and equity offerings between 2000 and 2006. The results indicate that such offerings did not significantly affect the accounting numbers, suggesting that the quality of accounting information is not affected by public stock and bond offerings.
Highlights
Various studies have examined the characteristics of firms’ accounting results and their components in recent years (Dechow & Dichev, 2002; Dechow & Schrand, 2004; Burgstaher; Hail & Leuz, 2006; Paulo & Martins, 2007)
The quality of accounting information is conceived as a broad set of dimensions, among them persistence, conservatism, earnings management and quality of the estimation of accruals (Dechow & Dichev, 2002; Dechow & Schrand, 2004; Burgstaher, Hail & Leuz, 2006; Dechow, Ge & Schrand, 2010)
The quality of accounting information can be considered as a set of various dimensions, such as persistence, conservatism, earnings management, quality of accruals measurement, transparency, level of disclosure and the relation of accounting numbers with stock prices or market value (Dechow, Ge & Schrand, 2010)
Summary
Various studies have examined the characteristics of firms’ accounting results and their components (accruals and cash flow) in recent years (Dechow & Dichev, 2002; Dechow & Schrand, 2004; Burgstaher; Hail & Leuz, 2006; Paulo & Martins, 2007). The quality of accounting information can be considered as a set of various dimensions (attributes), such as persistence, conservatism, earnings management, quality of accruals measurement, transparency, level of disclosure and the relation of accounting numbers with stock prices or market value (Dechow, Ge & Schrand, 2010). 29-31) point out various institutional factors that affect accounting information to different extents, among them the system of financing businesses, concentration of ownership, inflation, the legal system and tax system They consider that in countries where the capital market is the main source of financing for companies, such as in the United States and United Kingdom, accounting information is tailored mainly to help investors estimate and value future cash flows. The public placement of bonds accounts for a much greater volume of financial resources than do stock offerings by Brazilian firms
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