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1.
Oliver Kim Steve C. Lim Taewoo Park 《Review of Quantitative Finance and Accounting》2009,32(2):145-168
In this paper we examine how sales affect earnings and in turn the stock price using a model in which sales contribute to
earnings by a fixed sales margin rate and the stock price responds more sensitively to sales-induced earnings than to non-sales-induced
earnings. We report that the regression coefficient of the sales margin (2.54) is about three times the earnings response
coefficient (0.85) for the full sample and can be as high as 19 times the earnings response coefficient for an industry (i.e.,
11.95 vs. 0.62 for restaurants). We contribute to the literature by identifying and documenting factors that make separating
out the sources of earnings more important in equity pricing.
相似文献
Taewoo ParkEmail: |
2.
We examine stock sales as a managerial incentive to help explain the discontinuity around the analyst forecast benchmark. We find that the likelihood of just meeting versus just missing the analyst forecast is strongly associated with subsequent managerial stock sales. Moreover, we provide evidence that managers manage earnings prior to just meeting the threshold and selling their shares. Finally, the relation between just meeting and subsequently selling shares does not hold for non-manager insiders, who arguably cannot affect the earnings outcome, and is weaker in the presence of an independent board, suggesting that good corporate governance mitigates this strategic behavior.
相似文献
Vicki Wei TangEmail: |
3.
We condition security price reactions to quarterly earnings announcements on whether firms disclose supplementary balance
sheet and/or cashflow information that can be used to estimate the consequences of earnings management. Disclosure of supplementary
information is voluntary, and thus, we consider the possibility that firms that disclose balance sheet and/or cashflow information
differ systematically from firms that do not disclose. Results indicate that investors discount evidence of earnings management
at the disclosure date when supplementary information is disclosed. Such results indicate more informed earnings interpretations
of quarterly earnings when firms provide balance sheet and/or cashflow information concurrently.
相似文献
William R. BaberEmail: |
4.
Louis T. W. Cheng Hung-Gay Fung Tak Yan Leung 《Review of Quantitative Finance and Accounting》2007,28(1):23-54
The literature has suggested that earnings and earnings forecasts provide stronger signals than dividends about future performance
of a firm. We test the information effects of simultaneous announcement of earnings and dividends in the Hong Kong market,
distinguished by three interesting features (concentrated family-shareholdings, low corporate transparency, and no tax on
dividends). Our results show significant share price reactions to unexpected earnings and dividend changes, but dividends
appear to play a dominant role over earnings in pricing, a result contrary to findings in the literature. The signaling hypothesis
works primarily for firms with earning increases, while the maturity hypothesis works mainly for firms with earnings declines.
相似文献
Tak Yan LeungEmail: |
5.
We investigate if the SEC’s recently mandated disclosure of fees for audit and nonaudit services paid by firms to their incumbent auditors affected the market’s perception of auditor independence and earnings quality. Following the initial fee disclosures in 2001, we find that the market valuation of quarterly earnings surprises (earnings response coefficient) was significantly lower for firms with high levels of nonaudit fees than for firms with low levels of such fees. In contrast, in the year prior to the new fee disclosures, there was no reduction in earnings response coefficients for firms that subsequently reported high nonaudit fees. Our evidence suggests that mandated fee disclosures provided new information that was viewed by the market as relevant to appraising auditor independence and earnings quality.
相似文献
Bin KeEmail: |
6.
Young-Soo Choi Stephen Lin Martin Walker Steven Young 《Review of Accounting Studies》2007,12(4):595-622
We examine disagreement between management and Thomson Datastream over the persistence of earnings components. Using income
statement and footnote disclosures, we identify the source and properties of disputed items. Disagreements typically reflect
opaque reporting practices (for example, in the case of transitory operating items) and restrictive classification rules (for
example, in the case of discontinued operations). Incremental and relative value relevance tests suggest that the majority
of management-specific adjustments reflect appropriate classification of earnings components by insiders. Nevertheless, evidence
consistent with strategic disclosure does emerge for a subset of management adjustments.
相似文献
Steven YoungEmail: |
7.
We provide an alternative explanation for the previous finding of analysts’ overreaction to extreme good news in earnings.
We show that such finding could be a result of analysts’ rational behavior in the face of high earnings uncertainty rather
than their cognitive bias. Extreme earnings performance tends to be associated with higher earnings uncertainty that generally
leads to more forecast optimism. Once this effect is accounted for, the univariate result of analysts’ overreaction to extreme
good news in earnings is subsumed, leaving only their underreaction in general.
相似文献
Jian XueEmail: |
8.
Shai Levi 《Review of Accounting Studies》2008,13(1):1-21
This study investigates firms’ decisions to disclose accruals information in earnings press releases versus to provide it
only in 10-Q filings and the impact of this disclosure on the pricing of accruals. I find that firms disclose accruals in
their press releases when earnings alone are a weak indication of cash flow performance and that following these disclosures
the accruals information is fully impounded into stock prices. The evidence suggests that when investor demand for accruals
is likely to exist and firms disclose the information in earnings press releases, the mispricing typically associated with
accruals is mitigated.
相似文献
Shai LeviEmail: |
9.
David Abad Sonia Sanabria José Yagüe 《Review of Quantitative Finance and Accounting》2009,32(3):287-308
Using Spanish data, this paper examines, for the first time, the differences in the intraday response of an order-driven market
to earnings announcements made during trading and non-trading hours. We show that the speed of reaction depends on timing
of the announcement: for overnight (daytime) announcements, the improvement in liquidity is (not) immediate. This finding
could explain why Spanish firms prefer to release the bad (good) earnings announcement in trading (non-trading) hours. This
strategic timing differs from the traditional disclosure policy in American markets, suggesting that different microstructures
may react differently to news releases and, consequently, drive the strategic timing of corporate disclosures.
相似文献
José Yagüe (Corresponding author)Email: |
10.
Hemang Desai Srinivasan Krishnamurthy Kumar Venkataraman 《Review of Accounting Studies》2006,11(1):71-90
We study the behavior of short sellers around earnings restatements. We find that short sellers accumulate positions in restating
firms several months in advance of the restatement and subsequently unwind these positions after the drop in share price induced
by the restatement. The increase in short interest is larger for firms with high levels of accruals prior to restatement.
We document that heavily shorted firms experience poor subsequent performance and a higher rate of delisting. Overall, these
results suggest that the motive for short selling is, at least in part, related to suspect financial reporting and that short
sellers pay attention to information being conveyed by accruals.
相似文献
Hemang DesaiEmail: Phone: +1-214-768-3185 |
11.
Firm diversification and earnings management: evidence from seasoned equity offerings 总被引:4,自引:3,他引:1
Chee Yeow Lim Tiong Yang Thong David K. Ding 《Review of Quantitative Finance and Accounting》2008,30(1):69-92
Popular press suggests that diversified firms are more aggressive in managing earnings than non-diversified firms. We examine
this claim in the seasoned equity offering (SEO) setting, where firms have been shown to have the incentive to manage earnings
upwards. Using the cross-sectional modified Jones [(1991) J Accounting Res 29:193–228] model to measure discretionary current accruals, we find that discretionary current accruals
are higher among diversified firms than in non-diversified ones. Our evidence is consistent with the view that the extent
of firm diversification is directly related to the degree of earnings management. We further show that diversified issuers
with high discretionary accruals underperformed other SEO firms.
相似文献
David K. DingEmail: |
12.
Stephen P. Baginski John M. Hassell Michael D. Kimbrough 《Review of Quantitative Finance and Accounting》2008,31(3):311-330
The 1990s were characterized by substantial increases in the performance of and investor reliance on financial analysts. Because
managers possess superior private information and issue forecasts to align investors’ expectations with their own, we predict
that managers increased the quality of their earnings forecasts during the 1990s in order to keep pace with the improved forward-looking
information provided by financial analysts, upon which investors increasingly relied. Using a sample of 2,437 management earnings
forecasts, we document an increase in management earnings forecast precision, management earnings forecast accuracy, and managers’
tendency to explain earnings forecasts in 1993–1996 relative to 1983–1986. Given that these forecast characteristics are linked
to greater informativeness and credibility, we also document that the information content of management earnings forecasts,
as measured by the strength of share price responses to forecast news, increased in 1993–1996 relative to 1983–1986. As expected,
the increased information content of management forecasts primarily occurred for firms covered by financial analysts.
相似文献
Michael D. KimbroughEmail: |
13.
Using a sample of seasoned equity offerings (SEOs), this paper examines the association between the choice of financial intermediary
and earnings management. We contend that with more stringent standards for certification and intense monitoring, highly prestigious
underwriters restrict firms’ incentives for earnings management to protect their reputation and to avoid potential litigation
risks, while firms with greater incentives for earnings management avoid strict monitoring by choosing low-quality underwriters.
Consistent with our predictions, we find an inverse association between underwriter quality and issuers’ earnings management.
In addition, we find that underwriter quality is positively related to SEOs’ post-issue performance, even after controlling
for the effect of earnings management. We also find that firms with low-underwriter prestige and high levels of earnings management
under-perform the most. However, the effect of underwriter choice on post-issue performance does not last long.
相似文献
Myung Seok ParkEmail: |
14.
The persistence of earnings per share 总被引:2,自引:2,他引:0
Luis A. Gil-Alana Rolando F. Peláez 《Review of Quantitative Finance and Accounting》2008,31(4):425-439
The persistence of innovations to accounting earnings per share, EPS, has important implications for equity valuation, yet
it remains a largely neglected subject. This paper employs various empirical tests in order to measure the persistence of
shocks to EPS for the S&P 500 index. Within the I(0)/I(1) paradigm the empirical evidence rejects the I(1) specification, supporting instead a trend-stationary representation. When fractional orders of integration are considered,
the results indicate that the detrended series is long memory (d > 0) and mean reverting (d < 1). The responses decay slowly to zero, albeit 50 quarters after an initial shock the responses remain significantly different
from zero. Likewise, the variance ratio evidence suggests that the effect of a shock persists over time spans characteristic
of the business cycle.
相似文献
Rolando F. Peláez (Corresponding author)Email: |
15.
James S. Linck Thomas J. Lopez Lynn Rees 《Review of Quantitative Finance and Accounting》2007,28(4):327-352
Firm management typically claims that voluntary accounting method changes (VACs) are made to enhance the informativeness of
earnings by better matching accounting practices with economic reality. In contrast, skeptics argue that managers adopt new
accounting procedures to opportunistically manage earnings and influence their firm’s stock price. In this paper, we investigate
these alternative motives for VACs. Specifically, we investigate whether VACs cause equity prices to deviate from their fundamental
values in the short-term by studying the long-run stock-price performance for a sample of firms that voluntarily change accounting
methods. In addition, we investigate changes in earnings informativeness by examining the behavior of earning response coefficients
and the relationship between earnings and future cash flows in years surrounding the VAC event. In contrast to prior research,
we find little evidence that a strategy based solely on the earnings effect of a VAC can generate abnormal returns. While
we find weak evidence of post-VAC abnormal returns for extreme VACs, this result appears to be driven by the accruals anomaly
documented in Sloan [Sloan, R. G. (1996). The Accounting Review, 71, 289–315]. Our evidence further suggests that earnings informativeness is not significantly altered by voluntary changes
in accounting methods. Taken together, our evidence suggests the market recognizes the financial statement effects of alternative
acceptable accounting methods and efficiently processes the valuation implications of VACs.
相似文献
Lynn Rees (Corresponding author)Email: |
16.
We find no evidence of accrual mispricing for firms that disclose accrual information at earnings announcements. For these
firms, the market differentiates the discretionary from the nondiscretionary components of the earnings surprise. In contrast,
the market fails to distinguish between the discretionary and the nondiscretionary components of the earnings surprise for
firms that do not disclose accrual information at earnings announcements. These firms experience some stock price correction
around the filing date. However, the correction is only partial, resulting in a post-filing drift.
相似文献
Henock LouisEmail: |
17.
Marcel Naujoks Kevin Aretz Alexander G. Kerl Andreas Walter 《Financial Markets and Portfolio Management》2009,23(1):3-29
We employ an innovative methodology suggested by Bernhardt et al. (J. Financ. Econ. 80:657–675, 2006) to examine the herding (or anti-herding) behavior of German analysts regarding earnings forecasts. This methodology avoids
well-known shortcomings often encountered in related studies, such as correlated information signals, unexpected common shocks
to earnings, systematic optimism or pessimism, or forecast target mismeasurement. Our findings suggest that German analysts
anti-herd, that is, they systematically issue earnings forecasts that are further away from the consensus forecast than their
private information indicates. Furthermore, we analyze the association between herding behavior and different characteristics,
including the size of the brokerage, general or firm-specific experience, and the coverage of firms on the Neuer Markt. We mainly confirm findings for the United States, for example, that anti-herding is more severe in cases of higher competition
among analysts. Contrary to anecdotal evidence, we also find anti-herding behavior in earnings forecasts for Neuer Markt firms during the “new economy” bubble.
相似文献
Andreas Walter (Corresponding author)Email: |
18.
Our study analyzes market reaction to the entire content of a large sample of analysts’ reports from the period 2002 to 2004
for the German market. In particular, we explore whether the three summary measures in the reports, i.e., recommendation revisions,
earnings forecast revisions, and target price forecast revisions are acknowledged by the market. Additionally, we investigate
if stated justifications in the written text of analysts’ reports contain information value beyond the three summary measures.
We find that earnings forecast revisions and target price forecast revisions contain valuable information, both unconditionally
and conditional on the rest of the information in the report. Our findings also reveal that justifications made by analysts
are of high salience to market participants. These justifications provide valuable information, both unconditionally and conditional
on all other types of information in a report. Our findings also suggest that business ties between banks and the analyzed
companies do not affect market reaction to dissemination of an analysts’ report.
相似文献
Andreas Walter (Corresponding author)Email: |
19.
Valuation of loss firms in a knowledge-based economy 总被引:2,自引:0,他引:2
Recent research in accounting has documented a substantial increase in the number of loss firms. Existing theories on the
valuation of loss firms are based on adaptation/abandonment options or limited liability, assuming that these firms are operationally
distressed. In this paper, we show that many loss firms do not fit this stereotype and identify the primary value drivers
of this new type of loss firms. Our analysis helps resolve the puzzling negative relation between earnings and market value
documented in prior research. Overall, our findings underscore the importance of “hidden assets” or intangibles in the study
of loss firms.
相似文献
Jianming YeEmail: |
20.
John J. Maher Robert M. Brown Raman Kumar 《Review of Quantitative Finance and Accounting》2008,31(2):167-189
We examine the valuation effects of overall demand for corporate equities combined with the influence of abnormal earnings
and unexpected funds flow. Our results indicate that the expected and unexpected net new total flow of funds into all stock
mutual funds do not by themselves have a meaningful effect on firm equity valuation. However, we find the combination of unexpected
funds flow and realized abnormal earnings have significant and important valuation effects. Importantly, the valuation impact
is greatest for those firms with high earnings growth potential that also operate in an environment characterized by high
information asymmetry.
相似文献
Raman KumarEmail: |