Quality concerns over managers' quarterly earnings guidance

Lin, Kuan-Chen

doi:10.1016/j.adiac.2017.07.002

Cited by 1 publication

(1 citation statement)

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“…This how certain researchers have wondered about the quality of quarterly earnings guidance. Lin (2017) considers that poor quality of quarterly earnings guidance misleads investors and may cause earnings management. Cessation of quarterly earnings guidance reduces pressure on managers and therefore contributes in reducing earnings management (Kim et al, 2017).…”

Section: Introductionmentioning

confidence: 99%

Fourth Quarter Earnings Volatility: Case of Firms Listed in DFM

Trabelsi

2019

ijafr

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Mandatory disclosure of quarterly financial reports for publicly traded companies, in the majority of jurisdictions around the world, is the direct consequence of applying “timeliness” as presented in the Conceptual Framework for Financial Reporting (the conceptual framework) developed jointly in 2010 by the International Accounting Standards Board (IASB) and the Financial Accounting Standards Board (FASB). Having relevant information available sooner would improve its capacity to influence decisions. However, the interim reports are not required to be audited. In UAE, companies whose securities are listed on a securities and commodities market licensed by the Securities and Commodities Authority (SCA) are required to notify and provide interim financial reports, which are reviewed by the external auditor of the company. The objective of this paper is to analyze, in UAE, the volatility of the fourth-quarter earnings compared with the previous three. This study includes four years (2012-2015) of quarterly financial statements of firms listed in Dubai Financial Market (DFM). In order to determine if interim results are suspect, the paper analyzes the magnitude of differences in fourth quarter earnings and revenues relative to the first three quarters by using the Kiger’s 1974 methodology. Overall, results indicate that the volatility of earnings and revenue in the fourth quarter is significantly higher than those of the first three quarters. This main finding would be explained by the necessary adjustments to the fourth quarter earnings and revenues in order to correct the estimation. In fact, the quarterly financial statements require the use of more estimates than those prepared at the end of the fiscal year. This research would contribute to better understanding the quality of interim reports in an emerging market context.

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Section: Introductionmentioning

confidence: 99%

Fourth Quarter Earnings Volatility: Case of Firms Listed in DFM

Trabelsi

2019

ijafr

View full text Add to dashboard Cite

show abstract

Quality concerns over managers' quarterly earnings guidance

Cited by 1 publication

References 49 publications

Fourth Quarter Earnings Volatility: Case of Firms Listed in DFM

Fourth Quarter Earnings Volatility: Case of Firms Listed in DFM

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