Analysts’ earnings forecasts are not perfectly correlated with actual earnings. One statistical consequence is that the most optimistic and most pessimistic forecasts are usually too optimistic and too pessimistic. The forecasts’ accuracy can be improved by shrinking them toward the mean. Insufficient appreciation of this statistical principle may partly explain the success of contrarian invest...

This paper investigates the relationship between earnings management and quality of earnings for the bankrupt and non-bankrupt firms listed in the Tehran Stock Exchange from 2007 to 2012.The earnings quality  is measured by four separate accounting-based earnings attributes: accruals quality, earnings persistence, earnings predictability; earnings and is also examined by testing the relationshi...

In financial economics, studies have shown that the textual content in earnings conference call transcript has predictive power for a firm's future risk. However, is very long and contains diverse non-relevant content, which poses challenges text-based risk forecast. This study investigates structural dependency within by explicitly modeling dialogue between managers analysts. Specifically, we ...

Intimate partner violence (IPV) is a serious, widespread problem that negatively affects women's lives, including their economic status. The current study explored whether the financial harm associated with IPV begins as early as adolescence. With longitudinal data from a sample of 498 women currently or formerly receiving welfare, we used latent growth curve modeling to examine the relationshi...

Purpose This study examines the role of intellectual capital disclosure (ICD) on earnings forecasting by analysts in pharmaceutical industry emerging countries, particularly Indonesia, Malaysia and Thailand. specifically each component ICD analysts' forecasts, which consists errors forecasted earnings, standard deviation analyst recommendations. Design/methodology/approach Panel data analysis i...

Firms scheduled to report earnings earn an annualized abnormal return of 9.9%. We propose a risk-based explanation for this phenomenon, in which investors use announcements to revise their expectations for non-announcing …rms, but can only do so imperfectly. Consequently, the covariance between …rm-speci…c and market cash-‡ow news spikes around announcements, making announcers especially risky....

When the Revelation Principle (RP) holds, managing earnings confers no advantage over revelation. We construct an explanation for earnings management that is based on limitations on owners’ ability to make commitments (a violation of the RP’s assumptions). Traditionally, earnings management is seen as sneaky managers pulling the wool over the eyes of gullible owners by manipulating accruals; ou...

We propose a new measure, the Ability to Forecast Earnings (AFE), to identify skilled fund managers. AFE focuses on stock performance during a short window around earnings announcements, in which price movements are predominantly due to firmspecific information revealing fundamental values. It is thus less affected by noise and other shocks in the market. Over the period 1984–2008, we find stro...