Do managers manage earnings to ‘just meet or beat’ analyst forecasts?

Habib, Ahsan; Hossain, Mahmud

doi:10.1016/j.intaccaudtax.2008.07.004

Cited by 24 publications

(34 citation statements)

References 63 publications

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“…The study presented evidence that when firms provided the financial disclosures required by IFRS, they benefitted since financial analysts were better able to predict earnings that were relevant to valuing firms' securities. Habib and Hossain (2008) presented evidence concerning firms' management of earnings and analyst forecasts in Australia. The study extended the literature on managers' attempts to meet or beat analyst forecasts to a market with a different type of legal environment than that found in prior studies.…”

Section: Analyst Forecastsmentioning

confidence: 99%

A review and analysis of international accounting research in JIAAT: 2002–2010

Dykxhoorn

Sinning

2010

Journal of International Accounting, Auditing and Taxation

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Section: Analyst Forecastsmentioning

confidence: 99%

A review and analysis of international accounting research in JIAAT: 2002–2010

Dykxhoorn

Sinning

2010

Journal of International Accounting, Auditing and Taxation

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“…They find these results are strongest for large firms. Whether Australian firms engage in earnings management to meet or beating analyst forecasts has also been considered by Habib and Hossain (). They did not find a significant difference between abnormal accruals for benchmark beating firms and non‐benchmark beating firms in this context (Habib and Hossain, ).…”

Section: Literature and Hypothesismentioning

confidence: 99%

“…Australian studies by Coulton et al . () and Habib and Hossain () do not find evidence of systematic earnings management to meet or beat benchmarks based on comparisons of abnormal accruals for benchmark beaters and non‐benchmark beaters. This study provides further analysis of whether earnings benchmarks are an indication of earnings management in Australia.…”

Section: Introductionmentioning

confidence: 96%

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Use of benchmarks in predicting earnings management?

Kent

Routledge

2015

Accounting & Finance

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This study conducts multiple approaches to identify whether earnings benchmarks are an indicator for earnings management within the Australian market. We investigate firms reporting small positive earnings and small positive earnings changes, referred to as benchmark beaters. Accrual quality models, earnings distributions and earnings persistence measures are applied to identify whether benchmark beating firms are manipulating earnings. Our findings suggest that the small positive earnings benchmark attracts earnings managers. However, we do not identify any evidence to indicate that the positive earnings change benchmark is a signal for earnings management.

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“…). Analyst following of Australian companies is considerably less intensive compared with that of US companies (Habib and Hossain ).…”

mentioning

confidence: 99%

Do Accruals Earnings Management Constraints and Intellectual Capital Efficiency Trigger Asymmetric Cost Behaviour? Evidence from Australia

Yang

2018

Australian Accounting Review

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This study examines whether accruals earnings management constraints and intellectual capital (IC) efficiency affect asymmetric cost behaviour by analysing data for the 1990 to 2016 period on firms listed on the Australian Securities Exchange. The analysis reveals that, on average, anti‐sticky cost behaviour occurs when firms have limited ability to engage in accrual earnings management to manipulate earnings in the current year. Further, IC efficiency – particularly human capital efficiency – increases the degree of cost stickiness. This study also finds that the degree of asymmetric cost behaviour is more pronounced in the post‐International Financial Reporting Standards (IFRS) period than in the pre‐IFRS period. The results suggest that the increased asymmetric cost behaviour in the post‐IFRS period derives from higher IC efficiency relative to the pre‐IFRS period. This study presents important implications for external stakeholders because they can consider the extent of earnings management constraints and the extent of firms’ IC efficiency as the determinants of asymmetric cost behaviour when assessing firms’ cost behaviour.

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Do managers manage earnings to ‘just meet or beat’ analyst forecasts?

Cited by 24 publications

References 63 publications

A review and analysis of international accounting research in JIAAT: 2002–2010

A review and analysis of international accounting research in JIAAT: 2002–2010

Use of benchmarks in predicting earnings management?

Do Accruals Earnings Management Constraints and Intellectual Capital Efficiency Trigger Asymmetric Cost Behaviour? Evidence from Australia

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