Abstract
The positive earnings–return relationship is weaker for US-listed firms with a calendar fiscal year. Furthermore, stock returns for these firms are more positively related to industry earnings, as a common fiscal year-end improves comparability of earnings. December fiscal year-ends are more frequent among large and low market-to-book industries and firms, consistent with firms trading off the benefits of better comparability against the associated higher accounting and auditing costs. Our results imply that the prevalence of a single standard for fiscal year-ends in other Asia–Pacific economies is indeed beneficial, as it promotes market transparency.
Original language | English (US) |
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Pages (from-to) | 503-530 |
Number of pages | 28 |
Journal | Asia-Pacific Journal of Financial Studies |
Volume | 48 |
Issue number | 4 |
DOIs | |
State | Published - 2019 |
Externally published | Yes |
Keywords
- Earnings–return regression
- Fiscal year choice
- Transparency
ASJC Scopus subject areas
- Finance