Timely recognition of accounting earnings could change depending on the firm circumstances or managers’ characteristics. Prior studies have found conflicting results regarding the timeliness of accounting earnings recognition. First, Basu (1997) and Penman and Zhang (2002) find accounting conservatism, which recognize loss compared to profit in more timely manner. On the other hand, Kothari et al. (2009) provide evidence of managers’ incentive to delay disclosure of loss but timely recognize earnings. This study examines if arbitrage profit is possible by perceiving the timeliness of accounting earnings recognition, and whether investors perceive earnings timeliness in making investment decisions. In addition, we analyze whether timely recognition of accounting earnings would have differential effect on future stock return after controlling for variable known to influence stock return such as firm-specific characteristics and financial reporting quality. Timeliness of earnings recognition is estimated following Khan and Watts (2009). Our findings are as follows. First, we perform a hedge portfolio return test and find investors could gain risk-free arbitrage profit by buying firms with timely recognition of earnings and selling firms with untimely earnings recognition in a year. Second, we perform cross-sectional regression after controlling for determinants known to influence financial reporting quality and future stock return. Results from cross-sectional regression analysis find a positive association between timely accounting earnings recognition and future stock price. In order to analyze the driver of the results, accounting earnings is divided into positive and negative earnings; profit and loss. We examine how each positive and negative earnings recognition timeliness and future stock price are related, and discover that risk-free arbitrage profit is possible by constructing hedge portfolio using both timely recognition of profit and loss. In firm-level cross-sectional regression analysis after controlling stock return determinants, only timeliness of loss recognition has a significant correlation with future stock return. Result indicates timely recognition of loss is positively associated with future stock return and could gain risk-free arbitrage profit by constructing hedge portfolio. Result also captures the fact that investors do not perceive timeliness of loss recognition in making investment decision. This research has following contributions. First, studies regarding market anomaly associated with accounting information has mostly been dealt from the perspective of accrual. This study extends the prior studies by examining market anomaly using the timeliness of accounting earnings recognition. Second, we find investors do not perceive the timely loss recognition in making investment decision, despite the fact that the purpose of accounting conservatism is to protect investors by recognize loss in timely manner and reduce information asymmetry. Third, the fact that investor do not perceive the timeliness in decision making process could indicate such firms’ accounting perceptions could be too difficult to be perceived in market price. Therefore, results of the paper propose the need for firms and regulators to support investors in easily understanding timeliness of accounting information.