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The Impact of Online Corporate Reporting Quality on Analyst Following and Properties of Their EPS Forecasts

Author

Listed:
  • Ahmed Saleh

    (University of East London, UK)

  • Clare Roberts

    (University of Aberdeen, UK)

Abstract

This paper investigates the impact of the quality of online corporate reporting (OCR) by UK listed firms on analyst behavior. Using a proposed new OCR index, we find that higher quality of OCR is related to increased analyst following. Additionally, we find that the main OCR component that drives analyst following is financial information content. However, we find no association between the quality of OCR and properties of analyst EPS forecasts as proxied by error in analyst EPS forecasts, dispersion in analyst EPS forecasts and common uncertainty in analyst information environment. We also investigate the direction of causality between OCR quality and analyst following and find that the later has no impact on the first. Furthermore, we find no evidence that herding behavior by financial analysts in the UK has interrupted the association between the quality of OCR and forecast properties. Our results contribute to the understanding of the role of analysts as information intermediaries in providing information to investors.

Suggested Citation

  • Ahmed Saleh & Clare Roberts, 2017. "The Impact of Online Corporate Reporting Quality on Analyst Following and Properties of Their EPS Forecasts," Journal of Accounting and Management Information Systems, Faculty of Accounting and Management Information Systems, The Bucharest University of Economic Studies, vol. 16(1), pages 59-88, March.
    • Handle: RePEc:ami:journl:v:16:y:2017:i:1:p:59-88
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    Citations

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    Cited by:

    1. del Río, Cristina & Ferrer, Elena & López-Arceiz, Francisco J., 2024. "Analyst optimism and market sentiment: Evidence from European corporate sustainability reporters," Research in International Business and Finance, Elsevier, vol. 69(C).
    2. Chahine, Salim & Daher, Mai & Saade, Samer, 2021. "Doing good in periods of high uncertainty: Economic policy uncertainty, corporate social responsibility, and analyst forecast error," Journal of Financial Stability, Elsevier, vol. 56(C).
    3. Niamh M. Brennan & Doris M. Merkl-Davies, 2018. "Do firms effectively communicate with financial stakeholders? A conceptual model of corporate communication in a capital market context," Accounting and Business Research, Taylor & Francis Journals, vol. 48(5), pages 553-577, July.
    4. Fabio Caputo & Simone Pizzi, 2021. "Ethical Firms and Web Reporting: Empirical Evidence about the Voluntary Adoption of the Italian “Legality Rating”," International Journal of Business and Management, Canadian Center of Science and Education, vol. 14(1), pages 1-36, July.
    5. Ahmad H. Juma’h & Yazan Alnsour, 2018. "Using Social Media Analytics: The Effect of President Trump’s Tweets On Companies’ Performance," Journal of Accounting and Management Information Systems, Faculty of Accounting and Management Information Systems, The Bucharest University of Economic Studies, vol. 17(1), pages 100-121, March.
    6. Elena Ferrer & Francisco J. López‐Arceiz & Cristina del Rio, 2020. "Sustainability disclosure and financial analysts' accuracy: The European case," Business Strategy and the Environment, Wiley Blackwell, vol. 29(8), pages 2939-2952, December.

    More about this item

    Keywords

    Financial analysts; disclosure quality; online corporate reporting; analyst behavior; analyst herding;
    All these keywords.

    JEL classification:

    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting

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