Download or read book Management Earnings Forecasts Cash Flow Forecasts and Earnings Management written by Hanmei Chen and published by . This book was released on 2008 with total page 104 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book The Quality of Analysts Cash Flow Forecasts written by Dan Givoly and published by . This book was released on 2008 with total page 49 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper examines properties of analysts' cash flow forecasts and compares these properties with those exhibited by analysts' earnings forecasts. Our results indicate that analysts' cash flow forecasts are of a considerable lower quality than their earnings forecasts. They are less accurate and improve at a slower rate during the forecast period. Further, analysts' cash flow forecasts appear to be, in essence, a naiuml;ve extension of their earnings forecasts and provide no incremental information on expected changes in firms' working capital. Consistent with their low quality and in contrast to their earnings forecasts, analysts' forecasts of cash flows are of limited information content and are only weakly associated with stock price movements. Finally, a measure of expected accruals based on the difference between analysts' earnings and cash flow forecasts has a very low power in detecting earnings management.

Download or read book Earnings Management written by Joshua Ronen and published by Springer Science & Business Media. This book was released on 2008-08-06 with total page 587 pages. Available in PDF, EPUB and Kindle. Book excerpt: This book is a study of earnings management, aimed at scholars and professionals in accounting, finance, economics, and law. The authors address research questions including: Why are earnings so important that firms feel compelled to manipulate them? What set of circumstances will induce earnings management? How will the interaction among management, boards of directors, investors, employees, suppliers, customers and regulators affect earnings management? How to design empirical research addressing earnings management? What are the limitations and strengths of current empirical models?

Download or read book Introduction to Earnings Management written by Malek El Diri and published by Springer. This book was released on 2017-08-20 with total page 120 pages. Available in PDF, EPUB and Kindle. Book excerpt: This book provides researchers and scholars with a comprehensive and up-to-date analysis of earnings management theory and literature. While it raises new questions for future research, the book can be also helpful to other parties who rely on financial reporting in making decisions like regulators, policy makers, shareholders, investors, and gatekeepers e.g., auditors and analysts. The book summarizes the existing literature and provides insight into new areas of research such as the differences between earnings management, fraud, earnings quality, impression management, and expectation management; the trade-off between earnings management activities; the special measures of earnings management; and the classification of earnings management motives based on a comprehensive theoretical framework.

Download or read book Why Do Managers Voluntarily Issue Cash Flow Forecasts written by Charles E. Wasley and published by . This book was released on 2010 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: We study a relatively recent change in voluntary disclosure practices by management, namely the issuance of cash flow forecasts. We predict and find that management issues cash flow forecasts to signal good news in cash flow, to meet investor demand for cash flow information, and to pre-commit to a certain composition of earnings in terms of cash flow versus accruals, thus reducing the degree of freedom in earnings management. Our results also suggest that management discloses good news in cash flow to mitigate the negative impact of bad news in earnings, to lend credibility to good news in earnings and to signal economic viability for young firms. Our finding that management cash flow forecasts primarily convey good news is in contrast to the generally negative nature of management earnings guidance and suggests that different incentives drive firm disclosure of different financial information.

Download or read book Capital Market Prices Management Forecasts and Earnings Management written by Anne Beyer and published by . This book was released on 2010 with total page 45 pages. Available in PDF, EPUB and Kindle. Book excerpt: The paper studies 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 paper 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 in the paper contains several predictions, including: (i) the manager manipulates earnings to reduce his forecast error at the earnings announcement date; (ii) the firm's stock price is more sensitive to the firm's actual earnings announcement than to the manager's forecast; and (iii) 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.

Download or read book Cash Flow Forecasting written by Andrew Fight and published by Elsevier. This book was released on 2005-10-12 with total page 263 pages. Available in PDF, EPUB and Kindle. Book excerpt: Budgets are like road maps -- they provide a direction for a corporates financial management. Balance sheets and statements of revenues also provide insights into how well a company is following that direction. But cash flow and cash flow forecasts are what guide the day-to-day itinerary for an organization. Budgets and cash flow are dynamic -- adjustments and changes can and should occur. If you understand what you are looking at, you can use cash flow to create better budgets and thus more accurate cash flow forecasting. Cash Flow Forecasting outlines the techniques required to undertake a detailed analysis of the cash flow dynamics of the business from both a historical and forward looking perspective. Cash Flow Forecasting explains how to: * Determine appropriate cash flow figures from pro forma financial statements * Interpret detailed cash flow forecasts and understand the difference between profit and cash flow * Conserve or generate cash in the short term * Evaluate different methods of project evaluation * Recognize the limitations of accounting information in valuing companies *Inspired by basic entry level training courses that have been developed by major international banks worldwide * Will enable students and those already in the finance profession to gain an understanding of the basic information and principles of cash flow forecasting * Includes questions with answers, study topics, practical "real world" examples and extensive bibliography

Download or read book Forecasts in IPO Prospectuses written by Denis Cormier and published by . This book was released on 2011 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: Prior research suggests that managers may use earnings management to meet voluntary earnings forecasts. We document the extent of earnings management undertaken within Canadian Initial Public Offerings (IPOs) and study the extent to which companies with better corporate governance systems are less likely to use earnings management to achieve their earnings forecasts. In addition, we test other factors that differentiate forecasting from non-forecasting firms, and assess the impact of forecasting and corporate governance on future cash flow prediction. We find that firms with better corporate governance are more likely to include a voluntary earnings forecast in their IPO prospectus. In addition, we find that corporate governance factors have an impact on the use of accruals management to meet forecasts, and on the predictive value of discretionary accruals.

Download or read book Soft Talk Management Cash Flow Forecasts written by Yan Cao and published by . This book was released on 2007 with total page 48 pages. Available in PDF, EPUB and Kindle. Book excerpt: We exploit a novel feature of management cash flow forecasts to investigate how managers' discretion over forecast verifiability affects the credibility and stock price effects of such forecasts. Many management cash flow forecasts are issued with an equivocal definition of the cash flow number being forecasted. We refer to such forecasts as quot;soft-talkquot; cash flow forecasts, and expect that due to their lower ex-post verifiability, they will have lower credibility and hence a smaller effect on stock prices when compared to unequivocal management cash flow forecasts. Our findings suggest that quot;soft-talkquot; is associated with an optimistic bias in management cash flow forecasts. Furthermore, managers' decision to issue quot;soft-talkquot; cash flow forecasts is related to economic factors including litigation risk, financial distress, actual cash flow performance, analyst following and the issuance of prior cash flow forecasts. While we find that management cash flow forecasts in general affect stock prices, consistent with the low verifiability of and optimistic bias in quot;soft-talkquot; cash flow forecasts, investors do not find good news quot;soft-talkquot; management cash flow forecasts credible. Finally, we examine the interaction between management earnings and cash flow forecasts and document that they serve to enhance the credibility in each other by reducing optimistic forecast bias. We also find that the bias in both types of forecasts is related and that the relation is a function of forecast difficulty.

Download or read book Cash Flow Forecasting written by William A. Loscalzo and published by Prentice Hall. This book was released on 1982 with total page 200 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book The Impact of Earnings Management on the Performance of Earnings Based Valuation Models written by Yao Tian and published by . This book was released on 2013 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: The purpose of this study is to examine empirically how the presence of earnings management may affect firm valuation. We compare the performance of earnings-based (e.g., Residual Income Model, RIM) and non-earnings-based (e.g., Discounted Cash Flow, DCF) valuation models, measured by absolute percentage pricing errors and absolute percentage valuation errors, for two subsets of publicly traded US firms: "Suspect" firms that are likely to have engaged in earnings management and “Normal” firms matched on industry, year and size. When valuation models use only analysts' short-term earnings forecasts as model inputs, results indicate that earnings management adversely affects the RIM model's ability to estimate a firm's intrinsic value while leaving that of DCF unchanged. We contribute to the valuation literature by showing that the well-known superiority of the RIM model over DCF does not hold when earnings are managed. By comparison, if the valuation model also includes analysts' long-term target price forecasts, RIM does not enjoy any economically significant accuracy advantage over DCF, with or without the presence of earnings management. Over a longer forecast horizon, financial analysts appear to account for the impact of earnings management on firms' future values by adjusting their target price forecasts. We extend the earnings management literature by demonstrating that the way analysts react to earnings management over short to long-term forecast horizons has different implications for the estimation ability of RIM vis-à-vis DCF models.

Download or read book Cross Listing Management Earning Forecasts and Firm Values written by Ning Yaqi Shi and published by . This book was released on 2007 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Journal of Accounting Economics written by and published by . This book was released on 1999-11 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book New Determinants of Analysts Earnings Forecast Accuracy written by Tanja Klettke and published by Springer Science & Business. This book was released on 2014-04-28 with total page 120 pages. Available in PDF, EPUB and Kindle. Book excerpt: Financial analysts provide information in their research reports and thereby help forming expectations of a firm’s future business performance. Thus, it is essential to recognize analysts who provide the most precise forecasts and the accounting literature identifies characteristics that help finding the most accurate analysts. Tanja Klettke detects new relationships and identifies two new determinants of earnings forecast accuracy. These new determinants are an analyst’s “general forecast effort” and the “number of supplementary forecasts”. Within two comprehensive empirical investigations she proves these measures’ power to explain accuracy differences. Tanja Klettke’s research helps investors and researchers to identify more accurate earnings forecasts.

Download or read book On the Association Between Corporate Voluntary Disclosure and Earnings Management written by Ron Kasznik and published by . This book was released on 1995 with total page 262 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Benchmark Beating and Its Implications for Earnings Management written by Naibuka Uluilakeba Saune and published by . This book was released on 2014 with total page 328 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Earnings Management The Influence of Real and Accrual Based Earnings Management on Earnings Quality written by and published by GRIN Verlag. This book was released on 2024-01-31 with total page 81 pages. Available in PDF, EPUB and Kindle. Book excerpt: Master's Thesis from the year 2019 in the subject Business economics - Accounting and Taxes, University of Duisburg-Essen, course: Master Thesis, language: English, abstract: This paper delves into various theories and approaches, aiming to define and differentiate earnings management from related concepts such as fraud, expectation management, and impression management. It explores the goals and incentives driving earnings management, including maximizing or minimizing earnings, beating targets, and smoothing. At the onset of the new millennium, corporate scandals rocked the business world, eroding trust in management, boards of directors, and the accounting profession. In response, regulations and policies aimed at enhancing corporate governance and financial reporting were swiftly implemented. The credibility, clarity, and consistency of financial reporting practices play a pivotal role in enabling investors to make informed decisions. Accurate and fair financial performance representations, as opposed to inflated and misleading figures, are essential for market players, including shareholders and creditors. Investors rely on audited financial reports to guide their investment decisions, underscoring the critical importance of accuracy and reliability in publicly available financial disclosures. Auditors, by reducing the risk of material misstatement, ensure the integrity of the information disclosed in a company's financial statements. Management, with the goal of achieving promised targets and ensuring the company's existence, may engage in earnings management as a strategic contribution to corporate policy. Financial reporting serves as a means to distinguish well-performing companies from their counterparts, facilitating efficient resource allocation and empowering stakeholders to make effective decisions. The disclosed earnings results significantly impact a firm's overall business activities and management decisions, particularly in satisfying analysts' expectations, which can influence equity value. While accounting standards play a role, the quality of financial statements is more influenced by company-specific and institutional factors shaping managers' incentives. These factors lead to financial reporting practices being viewed as the outcome of a cost-benefit assessment.