Footnote:
In: Australian Accounting Review, 29(1), 20-35
Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments 2019 erstellt
Description:
We respond to a specific gap identified in the prior literature by examining whether dividend paying status and dividend size are associated with accruals quality, using three accrual-based earnings quality proxies on a large sample of 2,387 firm-year observations over 17 years in a developing economy, South Africa. We also conduct univariate tests to identify differences in characteristics between dividend and non-dividend paying firms; and large and small dividend paying firms.We find that dividend paying status is positively associated with accruals quality. This association remains robust over sub-groups of firms that differ in size, growth, profitability, age, maturity, leverage, capital intensity and propensity to raise new capital. We extend the prior literature by using quintiles of dividend size to further investigate the association between dividend size and accruals quality. We find that larger dividend paying firms are associated with better accruals quality, and that this relationship is stronger among firms that pay average sized dividends. Additionally, we find significant differences in characteristics between dividend and non-dividend paying firms and between large and small dividend paying firms. Based on our results, policymakers, regulators, legislators and boards may want to explore the use of dividend policy as a corporate governance mechanism