We provide new evidence about how analysts incorporate and improve on management ETR forecasts. Quarterly ETR reporting under the integral method provides mandatory point-estimate forecasts by management, but firms must record certain “discrete” tax items fully in the quarter they occur,...

Analyst forecasting bias is frequently attributed to opportunism. We argue that opportunism is not a necessary condition for bias and propose a simple model, based on research in behavioral economics and psychology, of belief-based probability weighting. The model is used to develop benchmarks...