Title: Do Managers' Accrual Decisions Speak Louder Than Words?
Abstract: This paper examines whether analyst earnings forecast revisions around management earnings forecasts are conditioned on managers' previous accrual decisions. We find that analysts rely less heavily on management earnings forecast information when it conflicts with prior signals about earnings performance contained in accruals. Moreover, we find that analyst earnings forecast errors decline by a smaller amount around management earnings forecasts when management earnings forecast information and prior accrual signals are inconsistent. These findings suggest that the influence of management earnings forecasts on analysts' earnings expectations is contingent upon managers being able to convince analysts as to the informativeness of these disclosures in light of prior signals about earnings performance contained in accruals.
Publication Year: 1998
Publication Date: 1998-01-01
Language: en
Type: article
Indexed In: ['crossref']
Access and Citation
Cited By Count: 16
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