... The sample represents the 704 nonfinancial firms on the Bombay Stock Exchange. With a 21-year period, the authors used the McNichols (2002) model to find discretionary accruals (DA); firm FP is captured through accounting-based (return on assets and earnings per rupee share capital) and market-based...

... of diversified firms have less need for accruals management because diversified firms had more free cash flows which naturally reduces earnings variability. This study also found that diversified firms had no informational asymmetry problems which reject the asymmetric information hypothesis. In addition, debt...