Putting an end to the “earnings game” requires that CEOs reclaim the initiative by avoiding earnings guidance and managing expectations in such a way that their stocks trade reasonably close to their intrinsic value. In place of earnings forecasts, management should provide information about...

This paper analyzes whether the new business segment reporting disclosure rules, SFAS 131, will actually provide capital market participants with more predictive ability than the previous rules. For this we conduct three experiments. Two experiments with advanced accounting students as subjects,...

This study examines whether key characteristics of analysts' forecasts — timeliness, accuracy, and informativeness — change when investor demand for information is likely to be especially high, i.e., during periods of high uncertainty. Findings reveal that when uncertainty is high, analysts'...

In this paper, we assess the equity value relevance of disclosure-derived financial statement adjustments. Prior literature has explored only the incremental explanatory power of individual adjustments, or has assessed the superiority of earnings recast using only a subset of prescribed...

This paper examines the initiation of analyst coverage of IPO firms in the presence of management forecasts. For a sample of 763 Australian IPOs from 1992 to 2004, we find firms that provide a management forecast in the prospectus are more likely to receive analyst coverage, after correcting for...

We investigate whether the adoption of IFRS in 2005 by Australian firms has been associated with a loss of potentially useful information about intangible assets, as conjectured by Matolcsy and Wyatt (2006). We find that the negative association between analyst forecast error...

Recent literature suggests that other information included with management earnings forecasts may not be useful to the market as a direct disclosure. I use regression analysis to investigate whether this type of disclosure can help analysts to formulate more accurate forecasts of earnings....

This paper assesses the performance of securities analysts in forecasting the future earnings of intangible firms. The assessment is relative to extrapolative time-series models of earnings forecasts. The paper's results show that the forecast errors produced by both analysts and extrapolative...

The purpose of this paper is to study the impact of beating analysts' forecasts and the impact of analysts' forecast dispersion on the pricing of firms' credit default swaps (CDSs). CDS premium is the compensation required by investors for bearing firms' credit default risk. Sell-side analysts...

Regulators and the investment community have been concerned that institutional investors pressure financial analysts through trading commission fees to issue optimistic opinions in support of their stock positions. We use a unique dataset that identifies mutual fund companies' allocation of...