Governance quality and the pricing of discretionary accruals: American field study

The aim of this paper is to examine the relationship between efficient governance structure and the information content of discretionary accruals. To determine governance scores, Data Envelopment Analysis is applied to a sample of 149 American firms for the period 1998 to 2003. The findings indicate that the association between stock return and discretionary accruals is greater for firms having a good corporate governance structure.