Do financial analysts compel firms to make accounting decisions? Evidence from goodwill impairments

• 成果类型: Article
• 署名作者: Ayres, Douglas R.; Campbell, John L.; Chyz, James A.; Shipman, Jonathan E.
• 署名单位: Butler University; University System of Georgia; University of Georgia; University of Tennessee System; University of Tennessee Knoxville; University of Arkansas System; University of Arkansas Fayetteville
• 刊物名称: REVIEW OF ACCOUNTING STUDIES
• ISSN/ISSBN: 1380-6653
• DOI: 10.1007/s11142-019-09512-0
• 发表日期: 2019
• 页码: 1214-1251
• 关键词: CORPORATE DISCLOSURE; stock recommendations; earnings management; INVESTMENT ANALYSIS; coverage; INFORMATION; DISCRETION; models; news; size

摘要

This paper examines whether financial analysts' presence compels recognition of goodwill impairments. Analysts could impact managers' impairment decisions in at least two ways: (1) by improving the information environment through their analysis of firm performance (i.e., ex ante monitoring) and (2) by increasing the likelihood the manager and firm experience negative consequences when they fail to record a necessary impairment (i.e., ex post monitoring). We find that the likelihood of an impairment is more strongly related to an expected impairment when analyst coverage is higher. Consistent with both forms of monitoring, we also find that analyst downgrades before the firm's reporting date increase the probability that management records an expected impairment at the reporting date and that failing to record an expected impairment is associated with decreases in analyst following and a lower likelihood that managers are employed at the end of the following year.