Do analysts affect bad news timeliness?

Young, Alex

doi:10.1080/00014788.2017.1360174

Cited by 6 publications

(3 citation statements)

References 40 publications

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“…Regarding analyst influence on accounting information quality, some studies (Chen et al, 2015; Yu, 2008) find that analyst following curbs earnings management, while others (Burgstahler & Eames, 2006; Degeorge et al, 1999) find that firms manage earnings to achieve analyst forecast targets. Other research finds that analyst following increases accounting conservatism (Sun & Liu, 2011) and bad news timeliness (Young, 2018). As information intermediaries and expert users of corporate financial information, analysts are regarded as an external governance mechanism (Jensen & Meckling, 1976) that helps mitigate agency problems (Fama, 1980; Jensen & Meckling, 1976) caused by conflicts of interest.…”

Section: Background Literature and Hypothesesmentioning

confidence: 99%

Analyst following, disclosure quality, and discretionary impairments: Evidence from China

Jiang

2020

Financ Manag Account

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Financial statement preparers' discretion in fair value measurements is integral to asset impairment accounting. Firms may misuse this discretion to report more or less impairment loss than is warranted by underlying economic circumstances. Using data from a sample of publicly listed firms in China, this study finds that analyst following reduces abnormal impairment loss, the portion of reported impairment loss that cannot be explained by corporate economic circumstances and that this effect is more pronounced for firms with lower information disclosure quality. However, the reducing effects of analyst following and its interaction with disclosure quality are greater for income-decreasing than for income-increasing abnormal impairment loss. Additional analyses support the argument that these differences are attributable to the dominance of accounting's contracting role over its informational role. Overall, the findings indicate that the influence of analyst following on discretionary impairment accounting decisions is moderated by disclosure quality and by the relative importance of accounting's contracting and informational roles in an emerging market setting.

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Section: Background Literature and Hypothesesmentioning

confidence: 99%

Analyst following, disclosure quality, and discretionary impairments: Evidence from China

Jiang

2020

Financ Manag Account

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“…The notion of analysts acting as company monitors can be traced back to Jensen and Meckling (1976), who maintain that in an efficient market, the major benefit of analysts’ activities should be reflected in monitoring activities that reduce agency problems rather than in the profitability of stock picking. Recent literature has documented evidence that analysts monitor firm risk (Kim et al., 2019), corporate investment decisions (To et al., 2018), bad news timeliness (Young, 2018) and goodwill impairment recognition (Ayres et al., 2019). More importantly, both anecdotes and prior research provide evidence consistent with analysts monitoring corporate reporting, especially in fraud detection.…”

Section: Introductionmentioning

confidence: 99%

Analyst independence and earnings management

Huang

Jeanjean

Lui

2022

Business Fin & Account

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We examine whether analyst independence contributes to analysts’ monitoring role in deterring accruals earnings management. We first report a negative association between earnings management and the ratio of independent analysts to brokerage analysts covering a firm. Next, through the lens of the promotion of independent sell‐side research institutions by the 2003 Global Research Analyst Settlement, we document a significant decrease in earnings management on firms affected by the Global Settlement's mandate for time‐limited support to back independent research institutions. Additionally, we find that, as the aforementioned support ended, the extent of monitoring effectiveness reverted to a level indistinguishable from that before the Global Settlement. Finally, using closures and mergers of independent research institutions as a quasi‐natural experiment, we provide corroborating evidence consistent with analyst independence leading to more effective monitoring.

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“…Timeliness describes availability of information to users of financial statements before losing the opportunity of influencing economic decisions (Aktaş, 2011;Susandya, 2018;Young, 2017). It affects the relevance of the financial information presented.…”

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confidence: 99%

Effect of Accounting Information Systems, Teamwork, and Internal Control on Financial Reporting Timeliness

Mardi¹,

Perdana²,

Suparno³

et al. 2020

JAFEB

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This study aims to analyze the factors affecting the timeliness of cooperative financial reporting. The methods of measurement and accountability of financial statements must be timely, as it is critical information for making decision. Factors related to accounting information system problems such as timeliness of financial reporting, accounting information systems, teamwork, and internal control were identified in the study as a model. The method in this research is quantitative by taking survey data. The data were processed using SPSS 25, with a model test and partial test to produce a study to analyze the factors that affect the timeliness of cooperative financial reporting. The samples consisted of 60 cooperatives from the city of Tangerang, in Indonesia. The correspondents have published financial reports for each period of the current year and were a legal entity. Furthermore, primary data were collected by a questionnaire using a Likert scale and analyzed by multiple linear regression. The results showed that the Accounting Information System, Teamwork, and Internal Control had a positive and significant effect on the Timeliness of Financial Report Submission. Therefore, the cooperative that prepares financial reports in a timely manner has applied the principles of accountability and transparency.

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Do analysts affect bad news timeliness?

Cited by 6 publications

References 40 publications

Analyst following, disclosure quality, and discretionary impairments: Evidence from China

Analyst following, disclosure quality, and discretionary impairments: Evidence from China

Analyst independence and earnings management

Effect of Accounting Information Systems, Teamwork, and Internal Control on Financial Reporting Timeliness

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