We perform a comprehensive analysis on the relation between a firm’s life cycle and its financial reporting quality. Using abnormal accruals, abnormal revenues, restatements, and others, we provide evidence that there is considerable variation in financial reporting quality across the life cycle. We observe an inverted U-shaped pattern of financial reporting quality, i.e., absolute values of abnormal accruals and abnormal revenues are higher (lower) during the introduction, growth, shakeout, and decline (mature) stages. This pattern is driven by poor matching of current expenses with current revenues during the introduction and decline stages. Further, the likelihood of a restatement is higher in the introduction, shakeout, and decline stages, whereas the likelihood of an enforcement action is higher for growth firms relative to mature firms. Finally, the likelihood of a weakness in internal controls and the level of audit fees are higher for firms in the introduction and growth stages.

中文翻译：

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财务报告质量是否因公司生命周期而异？

我们对公司的生命周期与其财务报告质量之间的关系进行了全面分析。使用异常应计、异常收入、重述等，我们提供证据表明在整个生命周期中财务报告质量存在相当大的差异。我们观察到财务报告质量的倒 U 形模式，即在引入、增长、震荡和下降（成熟）阶段，异常应计和异常收入的绝对值较高（较低）。这种模式是由引入和下降阶段的当前费用与当前收入的匹配不佳造成的。此外，在引入、淘汰和衰退阶段重述的可能性更高，而相对于成熟企业，成长型企业采取强制措施的可能性更高。