The Time-series Properties of Accruals of Chinese Listed Companies

The role of the accounting accrual is to smooth the variance of the CFO,so the accrual is very important for accounting system.Givoly Hayn(2000) documents changes in the patterns of accruals over the last four decades in US,and found that the patterns are consistent with an increase in conservative.This paper found the same pattern in Chinese listed companies.That is decline of accruals over the past 9 years in China.But this conservatism can't explain this pattern when we used Basu model to measure conservatism.Secondly, we found that the accrual of Chinese listed companies declined after IPO.The decline of the accrual disappeared when we control the IPO effect.And we conclude that the time series property of accrual of Chinese listed companies is the result of the IPO effect.So the decline of the accrual could well turn out to be just the decline of the accrual after IPO.