The impact of conservatism on management earnings forecasts

• 成果类型: Article
• 署名作者: Hui, Kai Wai; Matsunaga, Steve; Morse, Dale
• 署名单位: University of Oregon; Hong Kong University of Science & Technology
• 刊物名称: JOURNAL OF ACCOUNTING & ECONOMICS
• ISSN/ISSBN: 0165-4101
• DOI: 10.1016/j.jacceco.2009.01.001
• 发表日期: 2009
• 关键词: to-market ratio; discretionary disclosure; accounting conservatism; voluntary disclosure; INFORMATION; association; prices

摘要

We investigate the empirical relation between a firm's accounting conservatism and management's issuance of quantitative earnings forecasts. Using three measures of conservatism from prior literature, along with two aggregate measures, we find a negative association between conservatism and the frequency, specificity, and timeliness of management forecasts. The results are robust to estimating the regression in changes, using firm fixed-effects, and using a two-stage instrumental variables approach. Overall, these results suggest that accounting conservatism acts as a Substitute for management forecasts by decreasing information asymmetry in the market and reducing potential litigation through the timely reporting of bad news. (C) 2009 Published by Elsevier B.V.