We theorize that accounting systems affect analysts' forecast accuracy through changes in earnings variability. We argue that the matching and historical cost principles reduce earnings variability, and hence, reduce analysts' earnings forecast errors. We also argue that restricting the choice...

An examination of analysts' accuracy in predicting annual earnings for firms reporting losses and firms reporting profits finds that analysts are ten times more accurate in predicting the earnings of profit firms. They have also improved their predictive ability for profit firms since the...

Using analysts' multi-period earnings forecasts, this paper investigates whether analyst forecast errors are related to asset growth and, if so, to what extent analysts' optimism for high-growth firms can explain the asset growth anomaly. We find that analyst forecasts are more optimistic for...

Prior studies show that managerial entrenchment deteriorates the credibility of earnings, hence reducing the value relevance of earnings. However, prior literature documents that the likelihood of earnings management is lower in firms with more antitakeover provisions since entrenched managers...

We argue that accounting conservatism makes earnings forecasting difficult by introducing transitory components in reported earnings. These transitory components are likely to be disproportionately represented in firms reporting losses. We show that analysts' mean forecast errors and absolute...

This study examines how competition affects the profitability of mutual funds' trading on the post earnings announcement drift (PEAD). Our results show that while the average fund actively pursuing this strategy does not generate significant outperformance, funds that manage to avoid competition...