Consensus Information and Nonprofessional Investors' Reaction to the Revelation of Estimate Inaccuracies

• 成果类型: Article
• 署名作者: Koonce, Lisa; Williamson, Michael G.; Winchel, Jennifer
• 署名单位: University of Texas System; University of Texas Austin; University of South Carolina System; University of South Carolina Columbia
• 刊物名称: ACCOUNTING REVIEW
• ISSN/ISSBN: 0001-4826
• DOI: 10.2308/accr.2010.85.3.979
• 发表日期: 2010
• 页码: 979-1000
• 关键词: earnings

摘要

To curb opportunism in financial reporting, researchers and regulators have proposed that firms be required to report reconciliations of prior year estimates. We provide experimental evidence that such disclosures are not sufficient for nonprofessional investors to identify firms that are opportunistic in their estimates. We also offer evidence suggesting that the value of these disclosures can be enhanced when nonprofessional investors seek out information about the estimate accuracy of other firms in the industry (i.e., consensus information). Our study provides insights about these disclosures and the mechanisms that enhance their effectiveness. Our findings have broad implications for standard-setters and future research designed to assist in identifying opportunistic management behavior.