Capital Market Prices, Management Forecasts, and Earnings Management

• 成果类型: Article
• 署名作者: Beyer, Anne
• 署名单位: Stanford University
• 刊物名称: ACCOUNTING REVIEW
• ISSN/ISSBN: 0001-4826
• DOI: 10.2308/accr.2009.84.6.1713
• 发表日期: 2009
• 页码: 1713-1747
• 关键词: voluntary disclosure; credibility; precision; incentives; MODEL

摘要

I analyze a manager's optimal earnings forecasting strategy and optimal earnings management policy in a setting where both the mean and the variance of the distribution generating the firm's cash flows are unknown. The analysis shows that the equilibrium price of the firm is a function of the manager's forecast, the firm's reported earnings, and the squared error in the manager's earnings forecast. The model contains several predictions, including: (1) the manager manipulates earnings to reduce his forecast error at the earnings announcement date; (2) the firm's stock price is more sensitive to the firm's actual earnings announcement than to the manager's forecast; and (3) controlling for the level of reported earnings and the magnitude of the earnings surprise, the firm's price is higher when it has a positive surprise at the earnings announcement date than when it has a negative surprise.