Analysts’ Forecast Accuracy in Germany: The Effect of Different Accounting Principles and Changes of Accounting Principles

Ernstberger, Jürgen; Krotter, Simon; Stadler, Christian

doi:10.1007/bf03342701

Cited by 41 publications

(55 citation statements)

References 82 publications

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“…11 Prior studies show that a firm's disclosure carries a predictable value to analyst forecast (Lang and Lundholm 1996;McEwen and Hunton 1999;Hope 2003;Bhat et al 2006;Ertimur et al 2007) and analysts are able to predict earnings accurately in the presence of high disclosure quality settings (Byard et al 2006). This suggests that AFA is a reflection of a firm's disclosure environment (Ernstberger et al 2008).…”

Section: Disclosure Quality (Disq)mentioning

confidence: 99%

Exploring the Impact of Internal Corporate Governance on the Relation Between Disclosure Quality and Earnings Management in the UK Listed Companies

Katmon

Farooque²

2015

J Bus Ethics

117

102

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This study investigates the impact of internal corporate governance on the relation between disclosure quality and earnings management in the UK listed companies, in particular whether governance mechanisms have deterrent effect on earnings management similar to firms' disclosure quality. Unlike prior literature, we measure a number of board and audit committee-related governance instruments, three disclosure quality proxies (i.e. Investor Relation Magazine Award, Forward-Looking Disclosure and Analyst Forecast Accuracy) and the Modified Jones Model to test the hypotheses of the study on a matched-pair sample data of Investor Relation Magazine Award winning and non-winning firms. Our findings in the OLS and sensitivity analyses using Heckman Procedure and 2SLS regressions consistently report a significant negative association between earnings management and disclosure quality for all proxies in restraining earnings management. In contrast, corporate governance variables are mostly insignificantly related to earnings management. This provides an emerging trend of the outperformance of disclosure quality over internal governance mechanisms in lessening earnings management. These findings warrant due attention of the policy makers, investors, corporate firms and other stakeholders in shaping a high-quality disclosure and governance regime in corporate settings to mitigate managerial manipulations of earnings across the countries in the world.

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Section: Disclosure Quality (Disq)mentioning

confidence: 99%

Exploring the Impact of Internal Corporate Governance on the Relation Between Disclosure Quality and Earnings Management in the UK Listed Companies

Katmon

Farooque²

2015

J Bus Ethics

117

102

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show abstract

“…Our focus on earnings persistence is motivated by prior research (discussed below) suggesting that earnings management and analyst forecast errors differ for firms reporting under IFRS versus DAS (Ashbaugh and Pincus, 2001;Barth et al, 2008;Ernstberger et al, 2008;Jeanjean and Stolowy, 2008;Chen et al, 2010) and that earnings are more value-relevant under IFRS than under DAS in some countries (Bartov et al, 2005;Ndubizu and Sanchez, 2006;Barth et al, 2008). These differences may be due to differences in earnings persistence for firms reporting under IFRS.…”

Section: Introductionmentioning

confidence: 96%

Do earnings reported under IFRS tell us more about future earnings and cash flows?

Atwood

Drake

Myers³

et al. 2011

Journal of Accounting and Public Policy

142

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“…Empirical studies also support the theoretical prediction that a high quality disclosure is associated with decreased forecast errors and forecast dispersion (Lang and Lundholm 1996;Ashbaugh and Pincus 2001;Ernsberger et al 2008;Hodgdon et al 2008;Bae et al 2008;Byard et al 2011;Barth et al 2012;Horton et al 2013). Financial statements users have more information about the audit process and the EP's quality in the post-EP signature period than pre-EP signature period.…”

Section: H1mentioning

confidence: 52%

Economic Consequences of Implementing the Engagement Partner: Signature Requirement in the UK

Liu¹

2017

IBR

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This paper examines whether and the extent to which requiring the audit engagement partner (EP) signature influences on information asymmetry, analysts' forecast errors, and forecast dispersion. I predict and find that, ceteris paribus, there is a significant decline in information asymmetry, analysts' forecast errors and forecast dispersion from the pre-to post-EP signature period in the UK over both of short-term (i.e., 2008-2010) and long-term (i.e., 2004-2014). These findings hold when using a control sample approach, indicating that my results are not likely due to the effect of concurrent events and correlated omitted variables. These findings suggest that implementing the EP signature requirement benefits analysts forecasts over a short-and long-term.

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Analysts’ Forecast Accuracy in Germany: The Effect of Different Accounting Principles and Changes of Accounting Principles

Cited by 41 publications

References 82 publications

Exploring the Impact of Internal Corporate Governance on the Relation Between Disclosure Quality and Earnings Management in the UK Listed Companies

Exploring the Impact of Internal Corporate Governance on the Relation Between Disclosure Quality and Earnings Management in the UK Listed Companies

Do earnings reported under IFRS tell us more about future earnings and cash flows?

Economic Consequences of Implementing the Engagement Partner: Signature Requirement in the UK

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