Download or read book The Joint Impact of Commitment to Disclosure and Prior Forecast Accuracy on Managers Forecasting Credibility written by Shankar Venkataraman and published by . This book was released on 2008 with total page 204 pages. Available in PDF, EPUB and Kindle. Book excerpt: Although managers rate concerns about being seen as committed disclosers as an important consideration in their voluntary disclosure decisions, prior research has paid limited attention to how investors view commitment to disclosure. This study experimentally tests two competing perspectives relating to how managers' commitment to disclosure and prior forecast accuracy jointly influence managers' forecasting credibility. The first perspective (the normative perspective) draws on economic theory and the second perspective (the omission bias perspective) draws on theory from psychology. The normative perspective suggests that commitment to disclosure and prior forecast accuracy will independently influence managers' forecasting credibility. In contrast, the omission bias literature suggests that the influence of commitment to disclosure on managers' forecasting credibility depends on managers' prior forecast accuracy. In other words, the normative perspective suggests two main effects, whereas the omission bias perspective suggests a commitment to disclosure x accuracy interaction. To test the competing predictions relating to the joint impact of commitment to disclosure and prior forecast accuracy on managers' forecasting credibility, I conduct an experiment. Results of this experiment support the omission bias perspective. Participants in the role of investors rate more (less) committed managers as more (less) credible, but only when they are also accurate. When managers are inaccurate, however, this relationship reverses. That is, more committed managers are viewed as less credible relative to their less committed peers. These results suggest that managers' concerns about commitment to disclosure are indeed valid, but only when they are accurate. When managers are less accurate, commitment to disclosure hurts, rather than helps, managers' credibility. Participants' valuation judgments as well as their judgments relating to a current disclosure are positively associated with their judgments of managers' forecasting credibility, suggesting that their assessment of managers' credibility may have significant valuation consequences. This study contributes to the voluntary disclosure literature and has implications for managers who provide earnings forecasts and for investors who use these forecasts in their investment decisions.
Download or read book The Joint Effect of Management s Prior Forecast Accuracy and the Form of its Financial Forecasts on Investor Judgment written by D. Eric Hirst and published by . This book was released on 2000 with total page 30 pages. Available in PDF, EPUB and Kindle. Book excerpt: We examine how investor reaction to management earnings forecasts is a joint function of the form of the forecast and management's perceived credibility. In a laboratory experiment involving 126 individual investors, we compare investors' earnings predictions and their confidence therein after receiving point and closed range forecasts issued by managements whose previous forecasting accuracy is known to be either high or low. We used point and range forecasts, because they differ in the degree to which they communicate management's uncertainty about the future. We use management's prior forecasting accuracy as a measure of management's credibility, because prior research has documented the importance of this factor when considering the usefulness of management's voluntary forecasts.Our results show that, as expected, investors' earnings predictions are responsive to management's forecasts. However, as we hypothesized, forecast form did not influence investors' earnings estimates. In contrast, investors' confidence in their earnings predictions was influenced by the form of management's forecasts, but this effect emerged only when management was previously accurate in their forecasting. A similar interactive pattern was found in the dispersion of investors' predictions about the company's future earnings. Finally, consistent with the hypothesis that confidence is an important determinant of investor behavior, we find that investors' judgments of future stock price appreciation are a positive function of both unexpected earnings and the change in their confidence.Our study extends the literature on management forecasts by empirically testing the joint influence of management's credibility (i.e., forecasting accuracy) and forecast form. The prior literature has argued that both factors should be important, but has not delineated whether or how these two factors might interact. We present a theoretical framework that indicates when both factors should influence investor judgment.
Download or read book Dissertation Abstracts International written by and published by . This book was released on 2009 with total page 668 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book The Impact of Management s Tone on the Perception of Management s Credibility in Forecasting written by Robert D. Slater and published by . This book was released on 2007 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: ABSTRACT: The purpose of this study is to examine the impact of management altering its tone in communications on participants' perceptions of management credibility. Management's tone in communicating with participants was manipulated using communications from management under two treatment conditions. In period one of the study management's tone was manipulated within the management statement on internal controls as required by the Public Company Accounting Oversight Board's (PCAOB) Auditing Standards No. 2. In period one, participants had no knowledge of management's prior forecasting accuracy. Consistent with predicted hypotheses, the findings reveal that management can increase its credibility with participants by communicating its empathy, responsiveness, and understanding. Management's increased credibility was measured using both a validated credibility scale and by examining participants' reliance on management's forecasts. In period two of the study all participants had knowledge of management's forecast failure in period one. The results from period two found that tone could impact the rating of management's credibility when management had previously failed to meet a forecast but that tone had no impact on participant's changes in their earnings per share estimates after management had previously failed to meet a forecast.
Download or read book Credibility of Managerial Forecast Disclosure Game Theory and Regulative Implications written by Michael Dobler and published by . This book was released on 2005 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: Managerial forecast disclosure has gained increasing interest. Besides voluntary publication, managers are more and more obliged to disclose forecasts by recent accounting regulation. This acknowledges the common proposition that forecasts were exceptionally relevant and decision useful information for investors. But it neglects the problems of credibility arising from the non-verifiable nature of forecasts. My paper analytically investigates the credibility of managerial forecast disclosure introducing a game theoretic perspective by extracting robust implications from disclosure models. The analysis is two-fold, aiming first at a non-regulated environment and second at an environment with audit or liability systems. The results are alarming: Without enforcement, forecast credibility is linked to very restrictive conditions. In particular, unfavourable forecasts, e.g. going concern uncertainties, will be withheld. Different audit and litigation systems may increase or may lessen, but not eliminate the deficits. Upon the results of my analysis, I derive general regulative implications on enforcement mechanisms, managerial information endowment, and disclosure. These may assist but cannot assure the credibility of managerial forecast disclosure. In conclusion, whatever regulatory steps are taken, the value of forecast publication currently discussed in the context of voluntary prospective value reporting and mandatory risk reporting appears to be overestimated.
Download or read book Prior Forecasting Accuracy and Investor Reaction to Management Earnings Forecasts written by Amy P. Hutton and published by . This book was released on 2009 with total page 46 pages. Available in PDF, EPUB and Kindle. Book excerpt: We examine the properties of firms' forecasting records and whether the accuracy of their prior earnings forecasts affects investor response to their subsequent forecasts. Within the context of a Bayesian model of investor learning, we find that the stock price response to management forecast news is increasing in prior forecast accuracy and also in the length of a firm's forecasting record. Further, we document that investors are more responsive to extreme good and bad news forecasts when a firm has an established forecasting record. Overall, these results suggest that a firm's prior forecasting behavior allows it to establish a forecasting reputation.
Download or read book Capital Market Consequences of Managers Voluntary Disclosure Styles written by Holly Yang and published by . This book was released on 2019 with total page 50 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper studies the capital market consequences of managers establishing an individual forecasting style. Using a manager-firm matched panel dataset, I examine whether and when manager-specific credibility matters. If managers' forecasting styles affect their perceived credibility, then the stock price reaction to forecast news should increase with managers' prior forecasting accuracy. Consistent with this prediction, I find that the stock price reaction to management forecast news is stronger when information uncertainty is high and when the manager has a history of issuing more accurate forecasts, indicating that individual managers benefit from establishing a personal disclosure reputation.
Download or read book Is There Safety in Numbers The Effects of Forecast Accuracy and Forecast Boldness on Financial Analysts Credibility with Investors written by Kathryn Kadous and published by . This book was released on 2009 with total page 41 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper reports the results of an experiment that examines how analyst forecast accuracy (i.e., how close an analyst's forecast is to realized earnings) and forecast boldness (i.e. how far the analyst's forecast is from the consensus forecast) affect the analyst's perceived credibility and investors' willingness to rely on and purchase the analyst's future reports. We hypothesize and find that forecast boldness magnifies the effect of forecast accuracy on these variables. That is, analysts who provide accurate, bold forecasts experience more positive consequences than those who provide accurate, non-bold forecasts, and analysts who provide inaccurate, bold forecasts experience more negative consequences than those who provide inaccurate, non-bold forecasts. We also find that these effects are not symmetric - the negative consequences of being bold and inaccurate exceed positive consequences of being bold and accurate. Our results are not sensitive to the level of the analyst's prior reputation.
Download or read book The Greenhouse Gas Protocol written by and published by World Business Pub.. This book was released on 2004 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: The GHG Protocol Corporate Accounting and Reporting Standard helps companies and other organizations to identify, calculate, and report GHG emissions. It is designed to set the standard for accurate, complete, consistent, relevant and transparent accounting and reporting of GHG emissions.
Download or read book Earnings Quality written by Jennifer Francis and published by Now Publishers Inc. This book was released on 2008 with total page 97 pages. Available in PDF, EPUB and Kindle. Book excerpt: This review lays out a research perspective on earnings quality. We provide an overview of alternative definitions and measures of earnings quality and a discussion of research design choices encountered in earnings quality research. Throughout, we focus on a capital markets setting, as opposed, for example, to a contracting or stewardship setting. Our reason for this choice stems from the view that the capital market uses of accounting information are fundamental, in the sense of providing a basis for other uses, such as stewardship. Because resource allocations are ex ante decisions while contracting/stewardship assessments are ex post evaluations of outcomes, evidence on whether, how and to what degree earnings quality influences capital market resource allocation decisions is fundamental to understanding why and how accounting matters to investors and others, including those charged with stewardship responsibilities. Demonstrating a link between earnings quality and, for example, the costs of equity and debt capital implies a basic economic role in capital allocation decisions for accounting information; this role has only recently been documented in the accounting literature. We focus on how the precision of financial information in capturing one or more underlying valuation-relevant constructs affects the assessment and use of that information by capital market participants. We emphasize that the choice of constructs to be measured is typically contextual. Our main focus is on the precision of earnings, which we view as a summary indicator of the overall quality of financial reporting. Our intent in discussing research that evaluates the capital market effects of earnings quality is both to stimulate further research in this area and to encourage research on related topics, including, for example, the role of earnings quality in contracting and stewardship.
Download or read book Environment Ethics and Behavior written by Max H. Bazerman and published by Lexington Books. This book was released on 1997 with total page 428 pages. Available in PDF, EPUB and Kindle. Book excerpt: In this collection of essays, leading social, cognitive and decision psychologists offer psychological theory and contemporary environmental and ethical issues.
Download or read book Model Rules of Professional Conduct written by American Bar Association. House of Delegates and published by American Bar Association. This book was released on 2007 with total page 216 pages. Available in PDF, EPUB and Kindle. Book excerpt: The Model Rules of Professional Conduct provides an up-to-date resource for information on legal ethics. Federal, state and local courts in all jurisdictions look to the Rules for guidance in solving lawyer malpractice cases, disciplinary actions, disqualification issues, sanctions questions and much more. In this volume, black-letter Rules of Professional Conduct are followed by numbered Comments that explain each Rule's purpose and provide suggestions for its practical application. The Rules will help you identify proper conduct in a variety of given situations, review those instances where discretionary action is possible, and define the nature of the relationship between you and your clients, colleagues and the courts.
Download or read book Powering the Digital Economy Opportunities and Risks of Artificial Intelligence in Finance written by El Bachir Boukherouaa and published by International Monetary Fund. This book was released on 2021-10-22 with total page 35 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper discusses the impact of the rapid adoption of artificial intelligence (AI) and machine learning (ML) in the financial sector. It highlights the benefits these technologies bring in terms of financial deepening and efficiency, while raising concerns about its potential in widening the digital divide between advanced and developing economies. The paper advances the discussion on the impact of this technology by distilling and categorizing the unique risks that it could pose to the integrity and stability of the financial system, policy challenges, and potential regulatory approaches. The evolving nature of this technology and its application in finance means that the full extent of its strengths and weaknesses is yet to be fully understood. Given the risk of unexpected pitfalls, countries will need to strengthen prudential oversight.
Download or read book Securities Regulation written by James D. Cox and published by . This book was released on 2006 with total page 194 pages. Available in PDF, EPUB and Kindle. Book excerpt: Covers the Offering Rules, the sweeping reforms for the public offering of securities adopted by the SEC in June 2005. This work includes the Dura Pharmaceuticals decision, with note material examining the full implications; examines the developments regarding forward looking statements and the significant Supreme Court decision; and more.
Download or read book Research on Corporate Sustainability written by Jody Grewal and published by . This book was released on 2020-09-02 with total page 66 pages. Available in PDF, EPUB and Kindle. Book excerpt: This monograph provides an overview of key papers in the corporate sustainability literature and directions for future research. It is structured on three key themes: measuring, managing and communicating corporate sustainability performance.
Download or read book Global Trends 2040 written by National Intelligence Council and published by Cosimo Reports. This book was released on 2021-03 with total page 158 pages. Available in PDF, EPUB and Kindle. Book excerpt: "The ongoing COVID-19 pandemic marks the most significant, singular global disruption since World War II, with health, economic, political, and security implications that will ripple for years to come." -Global Trends 2040 (2021) Global Trends 2040-A More Contested World (2021), released by the US National Intelligence Council, is the latest report in its series of reports starting in 1997 about megatrends and the world's future. This report, strongly influenced by the COVID-19 pandemic, paints a bleak picture of the future and describes a contested, fragmented and turbulent world. It specifically discusses the four main trends that will shape tomorrow's world: - Demographics-by 2040, 1.4 billion people will be added mostly in Africa and South Asia. - Economics-increased government debt and concentrated economic power will escalate problems for the poor and middleclass. - Climate-a hotter world will increase water, food, and health insecurity. - Technology-the emergence of new technologies could both solve and cause problems for human life. Students of trends, policymakers, entrepreneurs, academics, journalists and anyone eager for a glimpse into the next decades, will find this report, with colored graphs, essential reading.
Download or read book Index to Theses with Abstracts Accepted for Higher Degrees by the Universities of Great Britain and Ireland and the Council for National Academic Awards written by and published by . This book was released on 2006 with total page 312 pages. Available in PDF, EPUB and Kindle. Book excerpt:
