(Nowy Sacz School of Business – National-Louis University, 2012) Durán-Vázquez, Rocío; Lorenzo-Valdés, Arturo; San Martín-Reyna, Juan Manuel
This study applied the modified Jones ́ model (1991) for selected companies of Mexico.
This model aims to assess the impact of Discretionary Accrual Information (DAI) on
financial reporting statements, in order to identify the value relevance of “earnings
quality”. We applied methodological criteria of Chung et al (2005) and Mukit & Iskandar
(2009). We analyzed financial information of the 35 stock included in the Index of Prices
and Quotations (IPC) of the Mexican Stock Exchange (BMV) for the period 2000 to 2011.
19 companies met the specifications of the model, for 48 quarters of information. The
analysis was done in three parts: first, an analysis of the modified Jones ́ model under panel
data considerations by using fixed effects and adjustments of performing autocorrelation
of order 1; second, a correlation analysis between the residuals of the modified Jones ́
model and the return of stock price in 3 annual closings years of study: 2007, 2008 and
2009; and third, we incorporated this variable (DAI) in the Ohlson model (of the financial
and corporate accounting literature) and we tested it with panel data analysis, under
fixed effects, throughout the study period.