Management of operating cash flows before and after the scandals in the early 2000s: An examination of meeting or beating analyst cash flow forecasts* |
| |
| Institution: | 1. School of Business, Central Connecticut State University, 1615 Stanley Street, New Britain, CT 06050, United States;2. Fedecrédito, 25 Av Norte 23 Calle Poniente, San Salvador, El Salvador;3. Business School, Seoul National University, 1 Gwanak-ro, Gwanak-gu, Seoul 08826, Korea;4. School of Business, Chonnam National University, Gwangju 61186, Korea;1. University of Huddersfield, Huddersfield Business School, Queensgate, Huddersfield HD1 3DH, UK;2. Heriot-Watt University, Edinburgh Business School, Mary Burton Building, Edinburgh EH14 4AS, UK;1. School of Economics and Management, Tsinghua University, Beijing 100084, China;2. Guanghua School of Management, Peking University, Beijing 100085, China;3. School of Accountancy, Singapore Management University, Singapore 188065, Singapore;4. College of Economics and Management, China Agricultural University, Beijing 100083, China;1. UNSW Sydney, School of Accounting, Sydney, NSW 2052, Australia;2. University of Western Australia, Accounting and Finance, Perth, WA 6009, Australia;1. University of Wisconsin – Whitewater, Department of Accounting, College of Business, Timothy J Hyland Hall 3431, Whitewater, WI 53190, United States;2. Clemson University, School of Accountancy, Wilbur O. and Ann Powers College of Business, 424B Walter T. Cox Blvd., Clemson, SC 29634, United States;3. Clemson University, Department of Finance, Wilbur O. and Ann Powers College of Business, 225 Walter T. Cox Blvd., Clemson, SC 29634, United States;1. School of Finance, Renmin University of China, China;2. School of Accounting, Dongbei University of Finance and Economics, China Internal Control Research Center, China |
| |
| Abstract: | We examine whether the stock market premium assigned to meeting or beating analyst estimates of cash flows from operations (hereafter, “CFO”) has changed after the publicized accounting scandals in the early 2000 s (“post-scandals period”). We also examine whether firms’ CFO management behavior associated with meeting or beating analyst CFO forecasts has changed after the scandals. We find that the market reward for firms that meet or just beat analyst CFO forecasts (“small beaters”) has increased in the post-scandals period, especially when the accuracy of CFO forecasts is relatively high. We also find that the extent of CFO management engaged in by small beaters has increased after the accounting scandals and that these firms appear to resort to the timing of CFO. Further, we find evidence that the “underpricing” of CFO is weaker in the post-scandals period that exhibits a greater extent of CFO management than before, suggesting that the reduction in the underpricing of CFO in the post-scandals period is at least partially due to CFO management. Overall, our findings suggest that firms responded to the rising importance of cash flow information after a series of accounting scandals by inflating reported CFO to a larger extent than they did before. |
| |
| Keywords: | |
| 本文献已被 ScienceDirect 等数据库收录！ |
|
