Overconfident CEOs are known to overestimate their ability to generate returns, overpay for target firms, and take excessive risks. We find a CEO's overconfidence can also indirectly affect other market participants, specifically analysts who issue earnings forecasts. First, firms with...

Does a company's stock mispricing influence its decision to issue an earnings forecast? Does executive compensation affect the nature of the forecast? How does the market react to these forecasts? I address these questions using cross-sectional and time-series variation in stock mispricing...

This paper investigates whether and how Japanese firms use management earnings forecasts as a performance target for determining executive cash compensation. Consistent with the implications of the agency theory, we find that the sensitivity of executive cash compensation varies with the extent...

The priceless, precious and lustrous resources of businesses should be utterly utilized for broader sense than for internal purposes.24.In addition, firms with a strong tradition of environmental preservation through conservation of natural resources, effective waste management and recycling...

This paper examines cost behaviour in the municipal setting and finds evidence of cost stickiness. Furthermore, as municipals in New Zealand are required to produce forecasts, it allows us to investigate whether asymmetric cost behaviour is incorporated into forecasts. We document an asymmetric...

This paper analyzes earnings management for the current year and the revision of management earnings forecasts (MEF) for the next year. It reports that the ratchet effect can be observed at the managerial level. Principals, who do not hold as much comprehensive information on productivity as...

We investigate the importance of sales forecasts, voluntarily disclosed by management, on the understanding of the accrual component of earnings. The challenging global economic environment, with unanticipated changes, emphasizes the importance of accrual- based reporting on investment...

This paper develops and tests a simultaneous equations model (SEM) for extending accounting based valuation models used in empirical studies. To calculate the ‘other information' variable in the Ohlson (1995) model, we derive forecasts of operating income from the SEM, rather than using...

In this study, we examine the effect of accrual-based earnings management on the association between managers' earnings forecast errors and accruals, which we label “managers' accrual-related forecast bias.” We build on extensive research which finds that managers engage in accrual-based...