Easterwood and Nutt (1999) show that analysts under-react to bad news in past earnings changes (or forecast errors) but over-react to good news in past earnings (or forecast errors) consistent with analysts exhibiting systematic optimism. We find that their results are sensitive to the cutoff...

This study investigates the relationship between the dispersion of analysts' earnings forecasts and stock price variability around quarterly earnings announcements. Consistent with theoretical predictions, the empirical analysis shows that stock price variability at the time of earnings...

We investigate the relation between the proportion of total compensation received by CEOs from stock options and the accuracy and bias of analysts' earnings forecasts. We hypothesize that forecast accuracy decreases as the proportion of stock option pay increases. Higher proportions of stock...

We examine the relation between analyst coverage and accruals quality. Because accrual accounting requires managers to estimate the future economic consequences of current events, accruals reflect estimation errors and potential managerial opportunism. This may lower accruals quality and provide...

Despite the increased frequency of analyst forecasts during earnings announcements, empirical evidence on the interaction between the information in the earnings announcement and these forecasts is limited. We examine the implications of reinforcing and contradicting analyst forecast revisions...

Theory suggests that the informativeness of price at the time of an earnings announcement increases with the number of informed traders who possess superior information to process news from firm disclosures (Kyle 1985; Admati and Pfleiderer 1988; Kim and Verrecchia 1994). In this paper, we investigate...

We provide evidence that analyst coverage increases as accruals quality decreases. This finding is consistent with the services of financial analysts becoming more valuable and in greater demand as accruals provide weaker signals about future cash flows. Further, it is accruals quality...

We propose a method of measuring the comparability of reported accounting numbers from the perspective of creditors. Our measure reflects the relationship between market variables related to default probabilities and key accounting numbers of interest to lenders. We demonstrate that this measure...

We first examine whether analysts with certain characteristics that prior research has identified are related to superior forecasting ability systematically time their forecast revisions later in the fiscal quarter. We then examine whether this superior ability persists after controlling for...

We first examine whether analysts with certain characteristics that prior research has identified are related to superior forecasting ability systematically time their forecast revisions later in the fiscal quarter. We then examine whether this superior ability persists after controlling for...