Estimating discretionary accruals using a grouping genetic algorithm

► The grouping genetic algorithm (GGA) converges at around 6000 generations. ► The GGA approach clearly outperforms the other grouping approaches. ► The GGA approach has the lowest standard deviation of discretionary accruals. ► The GGA approach detects the lowest levels of simulated earnings management. ► The 2-digit SIC grouping is the second best performing grouping approach.