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March 18, 2026The Accounting Review

Accounting-Based Risk Predictions: A Re-examination.

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Authors

PEPieter T. ElgersUniversity of Massachusetts Amherst

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Overview

Analysis finds accounting risk measures do not improve systematic risk predictions, suggesting instability over time.

Key Points

  • This study re-evaluates the effectiveness of accounting-based risk measures in predicting systematic risk of equity securities.
  • Replicated previous analyses using contemporary accounting risk variables.
  • Examined portfolios and risk levels over time.
  • Analyzed stability between accounting and market-based risk measures.
  • Accounting risk measures show no predictive advantage over market-based models.
  • Findings indicate instability in the relationship between accounting and market-based risk measures.
  • Previous claims of superior predictive capability for accounting measures are reconsidered.

Cite This Study

Pieter T. Elgers (1980) studied this question.

synapsesocial.com/papers/69ba43884e9516ffd37a4db3https://doi.org/10.2308/tar-4512462
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Also Consider

Synapse has enriched 5 closely related papers on similar clinical questions. Consider them for comparative context:

  1. 1The Forecasting Ability of Accounting Risk Measures: Some Additional Evidence.1979
  2. 2On the Association Between Smoothing Measures and the Risk of Common Stocks.1974 · 1 citations
  3. 3Conditional CAPM relationships in standard and accounting risk approaches2024 · 3 citations
  4. 4Identifying key factors in accounting-based models of credit risk based on a predictive model averaging approach2018
  5. 5The Impact of the Choice of Market Index on the Empirical Evaluation of Accounting Risk Measures.1982