The Estimation and Power of Alternative Discretionary Accruals Models

Discretionary accruals remain decade’s long measures to detect earnings management in empirical accounting research. The correctness of the specifications and test power information content for models remains unexplored based on samples most emerging market firms. Yet, country’s-based researchers have increasingly used different Jones-based discretionary proxy management. paper aims evaluate four decide appropriate one detection For aim, we apply regression methods estimate Jones-type – simple Jones, modified extended Jones cash flow model working capital evidence a final sample 1,852 firm-year 102 firms Nigeria during 2001–2020. results disclose that all are well-specified such likelihood Type I errors is minimum below significance level 5%. In order demonstrate test, simulations completed identify exhibits highest capability. implication this finding Nigerian sample.