Management Earnings Forecasts: A Review and Framework
Top Cited Papers
- 1 September 2008
- journal article
- review article
- Published by American Accounting Association in Accounting Horizons
- Vol. 22 (3), 315-338
- https://doi.org/10.2308/acch.2008.22.3.315
Abstract
SYNOPSIS: In this paper, we provide a framework in which to view management earnings forecasts. Specifically, we categorize earnings forecasts as having three components—antecedents, characteristics, and consequences—that roughly correspond to the timeline associated with an earnings forecast. By evaluating management earnings forecast research within the context of this framework, we render three conclusions. First, forecast characteristics appear to be the least understood component of earnings forecasts—both in terms of theory and empirical research—even though it is the component over which managers have the most control. Second, much of the prior research focuses on how one forecast antecedent or characteristic influences forecast consequences and does not study potential interactions among the three components. Third, much of the prior research ignores the iterative nature of management earnings forecasts—that is, forecast consequences of the current period influence antecedents and chosen characteristics in subsequent periods. Implications for researchers, educators, managers, investors, and regulators are provided.Keywords
This publication has 75 references indexed in Scilit:
- How Disaggregation Enhances the Credibility of Management Earnings ForecastsJournal of Accounting Research, 2007
- Earnings Guidance and Managerial MyopiaSSRN Electronic Journal, 2005
- Management Forecasts and Litigation RiskSSRN Electronic Journal, 2005
- Why Do Managers Fail to Meet Their Own Forecasts?SSRN Electronic Journal, 2004
- Can Investors Profit from the Prophets? Security Analyst Recommendations and Stock ReturnsThe Journal of Finance, 2001
- Motivations for a Change in Disclosure Frequency and Its Consequences: An Examination of Voluntary Quarterly Segment DisclosuresJournal of Accounting Research, 2000
- Credibility of Voluntary DisclosureThe RAND Journal of Economics, 2000
- The Joint Effect of Management's Prior Forecast Accuracy and the Form of Its Financial Forecasts on Investor JudgmentJournal of Accounting Research, 1999
- Unsystematic Security Price Movements, Management Earnings Forecasts, and Revisions in Consensus Analyst Earnings ForecastsJournal of Accounting Research, 1987
- Additional Evidence on the Information Content of Management Earnings ForecastsJournal of Accounting Research, 1984