Ratings : it's accrual world

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Ratings : it's accrual world / James M. Carson, Evan M. Eastman, David L. Eckles
Sumario: We find strong empirical evidence that overall accruals quality is significantly related to ratings. In particular, the results here indicate that higher accruals quality (lower reserve error volatility) is associated with higher financial strength ratings for property-casualty insurers. Moreover, decomposing accruals quality into innate and discretionary components indicates that both measures are significantly related to insurer ratings with the innate component appearing relatively more important