Do corporations manage earnings to meet/exceed analyst forecasts? Evidence from pension plan assumption changes

• 成果类型: Article
• 署名作者: An, Heng; Lee, Yul W.; Zhang, Ting
• 署名单位: University of North Carolina; University of North Carolina Greensboro; University of Rhode Island; University System of Ohio; University of Dayton
• 刊物名称: REVIEW OF ACCOUNTING STUDIES
• ISSN/ISSBN: 1380-6653
• DOI: 10.1007/s11142-013-9261-8
• 发表日期: 2014
• 页码: 698-735
• 关键词: STOCK RETURNS; FULLY REFLECT; RISK; UNDERPERFORMANCE; INFORMATION; performance; INVESTMENT; rewards; prices; FIRMS

摘要

A significantly larger number of firms increase the expected rate of return on pension plan assets (ERR) to make their reported earnings meet/exceed analyst forecasts than would be expected by chance. In the short run, the stock market reacts positively to these firms' earnings announcements, suggesting that investors fail to recognize that earnings benchmarks are achieved through ERR manipulation. In the long run, however, firms that employ this earnings management strategy significantly underperform control firms in both stock returns and operating performance.