Are Investors Influenced by Pro Forma Emphasis and Reconciliations in Earnings Announcements?

Elliott, William

doi:10.2308/accr.2006.81.1.113

Cited by 301 publications

(127 citation statements)

References 28 publications

Supporting

Mentioning

108

Contrasting

Unclassified

Order By: Relevance

“…Low Elliott (2006) In an experiment, participants made earnings potential judgments and an investment decision based on an earnings release that reported only GAAP earnings, emphasized either GAAP or pro forma earnings or provided a reconciliation of GAAP and pro forma earnings. Frederickson and Miller (2004) In an experiment, participants made stock price judgments based on an earnings release that reported only GAAP earnings or that reported both GAAP and pro forma earnings.…”

Section: Lowmentioning

confidence: 99%

Are MBA Students a Good Proxy for Non-professional Investors?

et al. 2006

Self Cite

View full text Add to dashboard Cite

ABSTRACT:We investigate a key assumption underlying much of the experimental research in financial accounting that graduate business students are a good proxy for nonprofessional investors. To conduct our investigation, we categorize recent experimental studies in financial accounting, based on the relative level of integrative complexity inherent in each study's task. We then conduct experiments using two tasks, one that is relatively low in integrative complexity and one that is relatively high in integrative complexity, and compare the responses of two groups of M.B.A. students and nonprofessional investors.Our results suggest that using M.B.A. students as a proxy for nonprofessional investors is a valid methodological choice, provided researchers give careful consideration to aligning a task's integrative complexity with the appropriate level of M.B.A. student. M.B.A. students who have completed their core M.B.A. courses and are enrolled in or have completed a financial statement analysis course are a good proxy for nonprofessional investors in tasks that are relatively low in integrative complexity. Though less definitive, the majority of our tests also suggest that these students are a good proxy for nonprofessional investors in tasks that are relatively high in integrative complexity. However, care must be taken when using students in the first-year core financial accounting course. In tasks that are relatively low in integrative complexity, these students perform similarly to nonprofessional investors except when they are asked to make an investment decision. In tasks that are relatively high in integrative complexity, these students acquire information similarly to nonprofessional investors, but they do not appear to integrate the information in a similar manner.

show abstract

Section: Lowmentioning

confidence: 99%

Are MBA Students a Good Proxy for Non-professional Investors?

et al. 2006

Self Cite

View full text Add to dashboard Cite

show abstract

“…If they do not include CI in their ratio analysis, the presentation format might still affect their judgements about the firm's financial condition and profitability. Regardless of the usefulness of the information, its salience or prominence can affect how users weight it during the decision process (Dreben et al, 1979;Duncan, 1980;Elliott, 2006;Russo, 1977).…”

Section: Rq: Do Nonprofessional Investors Use CI In Their Financial Cmentioning

confidence: 99%

“…Each scenario also included a positive (actuarial gain) or negative (actuarial loss) OCI item. As in prior research, MBA students were used as proxies for nonprofessional investors (Maines and McDaniel, 2000;Frederickson and Miller, 2004;Hodge et al, 2004;Elliott, 2006;Fortin and Berthelot, 2012). In fact, Elliott et al (2007) established that second-year MBA students enrolled in or having completed a financial statement analysis course make good proxies for nonprofessional investors in tasks relatively low in integrative complexity.…”

Section: Design and Participantsmentioning

confidence: 99%

Comprehensive income information: a user's perspective

Durocher¹,

Fortin²

2015

IJBAF

View full text Add to dashboard Cite

Abstract:The goal of this experimental study was to examine whether nonprofessional investors actually use comprehensive income (CI) in their financial calculations and analyses. We assessed how these actors process actuarial gains and losses on defined benefit pension plans as an "other comprehensive income" (OCI) item, and whether the presentation format for CI affects their judgements and decisions, while considering the directional impact of the OCI item (actuarial loss or actuarial gain). Using 125 Canadian MBA students as proxies for nonprofessional investors, we conclude that nonprofessional investors generally do not use CI, are not affected by its presentation format, and are influenced in relatively few of their judgements by the direction of the OCI item's impact. These findings have important implications for standard setters, who may wish to better conceptualise the CI concept and revisit their current emphasis on CI information.

show abstract

“…Financial reporting is the most important instruments for all companies to disclose the performance and the company condition to investors, regulators, and employees (Elliott, 2006). Shah and Butt (2011) said that although the accounting system had already worked to create strict rules to make the information presented reasonable, there were still many areas that could be developed to give description based on the company interest to the financial reports users.…”

Section: Introductionmentioning

confidence: 99%

“…The manager is supposed to use company reports as a means of impression management to strategically manipulate the perceptions and decisions of stakeholders (Yekini, Wisniewski, & Millo, 2016). The concept of impression management applied in the context of the company report of the company is to analyze the efforts to influence the stakeholder perceptions toward the organization especifically financial performance as described by Clatworthy and Jones (2001;2003;2006) and Courtis (2004), and environment social performance (Hooghiemstra, 2000). Bolino, Kacmar, Turnley, and Gilstrap (2008) showed that managers used various impression management techniques in the narrative part of the annual report.…”

Section: Introductionmentioning

confidence: 99%

Narrative Accounting Practices in Indonesia Companies

Meutia

Putra

2017

Binus Business Review

View full text Add to dashboard Cite

This research aimed to reveal creative accounting practices in the form of narrative accounting occuring in companies in Indonesia. Using content analysis, this research analyzed the management discussion and analysis section in the annual report on the group of companies whose performance had increased and declined in several companies listed on the Indonesian Stock Exchange. This research finds that the narrative accounting practices are applied in these companies. The four methods of accounting narratives are found in both groups of companies. There are stressing the positive and downplaying the negative, baffling the readers, differential reporting, and attribution.

show abstract

Are Investors Influenced by Pro Forma Emphasis and Reconciliations in Earnings Announcements?

Cited by 301 publications

References 28 publications

Are MBA Students a Good Proxy for Non-professional Investors?

Are MBA Students a Good Proxy for Non-professional Investors?

Comprehensive income information: a user's perspective

Narrative Accounting Practices in Indonesia Companies

Contact Info

Product

Resources

About