The Effects of Guidance Frequency and Guidance Goal on Managerial Decisions

• 成果类型: Article
• 署名作者: Wang, Elaine Ying; Tan, Hun-Tong
• 署名单位: University of Massachusetts System; University of Massachusetts Amherst; Nanyang Technological University
• 刊物名称: JOURNAL OF ACCOUNTING RESEARCH
• ISSN/ISSBN: 0021-8456
• DOI: 10.1111/j.1475-679X.2012.00470.x
• 发表日期: 2013
• 页码: 673-700
• 关键词: MANAGEMENT EARNINGS FORECASTS; see vol. 90; information asymmetry; disclosure; CONSEQUENCES; association

摘要

We conduct an experiment to examine the effects of guidance frequency (frequent vs. infrequent) and guidance goal (accuracy vs. meet/beat vs. truthful) on managers' operating decisions. We find that frequent guiders sacrifice total earnings for quarterly earnings predictability irrespective of their guidance goals. Furthermore, when guidance is infrequent, guiders with accuracy goals opt for quarterly earnings predictability over total earnings more often than do guiders with either meet/beat goals or truthful goals. These findings have implications for regulators and investors in terms of the unintended consequences of requesting frequent earnings guidance. Further, while managers may perceive that accuracy goals can help their firms establish forecasting and reporting reputations, we show that accuracy goals may result in dysfunctional internal managerial decisions, particularly when guidance is issued infrequently.