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Does analyst forecast informativeness affect managers’ financial reporting incentives?

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  • Krieg, Kimberly S.
  • Siagian, Ferdinand
  • Wu, Juan

Abstract

This study investigates how the informativeness of analyst forecasts affects managers’ financial reporting incentives. Using a novel Match Index to estimate the earnings management induced by analyst forecasts, we find that when analyst forecasts are less informative, managers place less value on using them as a benchmark and thus, engage in less earnings management to meet that benchmark.

Suggested Citation

  • Krieg, Kimberly S. & Siagian, Ferdinand & Wu, Juan, 2024. "Does analyst forecast informativeness affect managers’ financial reporting incentives?," Economics Letters, Elsevier, vol. 244(C).
    • Handle: RePEc:eee:ecolet:v:244:y:2024:i:c:s0165176524004798
    DOI: 10.1016/j.econlet.2024.111995
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    References listed on IDEAS

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    More about this item

    Keywords

    Analyst forecasts; Informativeness; Earnings management; Abnormal return;
    All these keywords.

    JEL classification:

    • G17 - Financial Economics - - General Financial Markets - - - Financial Forecasting and Simulation
    • G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates
    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting

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