Does The Stock Market See A Zero Or Small Positive Earnings Surprise As A Red Flag
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| Author | : Zhi-Xing Lin |
| Publisher | : |
| Total Pages | : 58 |
| Release | : 2007 |
| Genre | : |
| ISBN | : |
Manipulation of earnings or analyst earnings expectations is costly to firms. Manipulators of earnings and/or analyst earnings expectations therefore are likely to report earnings that precisely meet or narrowly beat analyst earnings forecasts, resulting in a zero or small positive earnings surprise. We predict that investors see such an earnings surprise as a red flag in their attempt to identify manipulators of earnings and/or analyst earnings expectations. Consistent with our prediction, we find the coefficient in the regression of abnormal stock returns on the earnings surprise (known in the literature as the earnings response coefficients or ERC) is significantly lower for zero and small positive earnings surprises than for earnings surprises in adjacent ranges. We find evidence that analysts see a zero or small positive earnings surprise as a red flag as well. The coefficient in the regression of analyst revisions of next-quarter earnings forecasts on the earnings surprise (the analyst ERC) is significantly lower for zero and small positive earnings surprises than for earnings surprises in adjacent ranges.
| Author | : Joshua Ronen |
| Publisher | : Springer Science & Business Media |
| Total Pages | : 587 |
| Release | : 2008-08-06 |
| Genre | : Business & Economics |
| ISBN | : 0387257713 |
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?
| Author | : |
| Publisher | : ScholarlyEditions |
| Total Pages | : 317 |
| Release | : 2012-01-09 |
| Genre | : Business & Economics |
| ISBN | : 1464966974 |
Issues in Accounting, Administration, and Corporate Governance: 2011 Edition is a ScholarlyEditions™ eBook that delivers timely, authoritative, and comprehensive information about Accounting, Administration, and Corporate Governance. The editors have built Issues in Accounting, Administration, and Corporate Governance: 2011 Edition on the vast information databases of ScholarlyNews.™ You can expect the information about Accounting, Administration, and Corporate Governance in this eBook to be deeper than what you can access anywhere else, as well as consistently reliable, authoritative, informed, and relevant. The content of Issues in Accounting, Administration, and Corporate Governance: 2011 Edition has been produced by the world’s leading scientists, engineers, analysts, research institutions, and companies. All of the content is from peer-reviewed sources, and all of it is written, assembled, and edited by the editors at ScholarlyEditions™ and available exclusively from us. You now have a source you can cite with authority, confidence, and credibility. More information is available at http://www.ScholarlyEditions.com/.
| Author | : Stewart Jones |
| Publisher | : Routledge |
| Total Pages | : 559 |
| Release | : 2015-05-22 |
| Genre | : Business & Economics |
| ISBN | : 1135107262 |
Financial accounting theory has numerous practical applications and policy implications, for instance, international accounting standard setters are increasingly relying on theoretical accounting concepts in the creation of new standards; and corporate regulators are increasingly turning to various conceptual frameworks of accounting to guide regulation and the interpretation of accounting practices. The global financial crisis has also led to a new found appreciation of the social, economic and political importance of accounting concepts generally and corporate financial reporting in particular. For instance, the fundamentals of capital market theory (i.e. market efficiency) and measurement theory (i.e. fair value) have received widespread public and regulatory attention. This comprehensive, authoritative volume provides a prestige reference work which offers students, academics, regulators and practitioners a valuable resource containing the current scholarship and practice in the established field of financial accounting theory.
| Author | : Malek El Diri |
| Publisher | : Springer |
| Total Pages | : 120 |
| Release | : 2017-08-20 |
| Genre | : Business & Economics |
| ISBN | : 3319626868 |
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.
| Author | : Lawrence D. Brown |
| Publisher | : |
| Total Pages | : 22 |
| Release | : 2014 |
| Genre | : |
| ISBN | : |
I show that the median earnings surprise has shifted rightward from small negative (miss analyst estimates by a small amount) to zero (meet analyst estimates exactly) to small positive (beat analyst estimates by a small amount) during the 16 years, 1984 to 1999. I show that a rightward temporal shift in median surprise from negative to positive describes earnings, but neither profits nor losses. Median profit surprise shifts within the positive quadrant, from zero to one cent per share. Median loss surprise shifts within the negative quadrant from extreme negative (about -33 cents per share) to zero. I show that the median surprise for profits exceeds that for losses in every year. I document significant positive temporal trends in both meet and beat analyst estimates for both profits and losses, but I find a greater frequency of profits that either meet or beat analyst estimates in every year. I find a significant positive temporal trend in positive profits that are 'a little bit of good news,' and a significant negative temporal trend in managers who report losses that are an 'extreme amount of bad news.' My results are robust to the four internal validity threats I consider - namely temporal changes in: (1) analyst forecast accuracy, (2) the mix of earnings of one sign preceded by earnings of another sign four quarters ago, (3) the timeliness of the most recent analyst forecast, and (4) the I/B/E/S definition of actual earnings. I find that managers of growth firms are relatively more likely than managers of value firms to report good news profits. I show that when they do report positive profit surprises, managers of growth firms are more likely to report 'a little bit of good news' in every year.
| Author | : Financial Crisis Inquiry Commission |
| Publisher | : Cosimo, Inc. |
| Total Pages | : 692 |
| Release | : 2011-05-01 |
| Genre | : Political Science |
| ISBN | : 1616405414 |
The Financial Crisis Inquiry Report, published by the U.S. Government and the Financial Crisis Inquiry Commission in early 2011, is the official government report on the United States financial collapse and the review of major financial institutions that bankrupted and failed, or would have without help from the government. The commission and the report were implemented after Congress passed an act in 2009 to review and prevent fraudulent activity. The report details, among other things, the periods before, during, and after the crisis, what led up to it, and analyses of subprime mortgage lending, credit expansion and banking policies, the collapse of companies like Fannie Mae and Freddie Mac, and the federal bailouts of Lehman and AIG. It also discusses the aftermath of the fallout and our current state. This report should be of interest to anyone concerned about the financial situation in the U.S. and around the world.THE FINANCIAL CRISIS INQUIRY COMMISSION is an independent, bi-partisan, government-appointed panel of 10 people that was created to "examine the causes, domestic and global, of the current financial and economic crisis in the United States." It was established as part of the Fraud Enforcement and Recovery Act of 2009. The commission consisted of private citizens with expertise in economics and finance, banking, housing, market regulation, and consumer protection. They examined and reported on "the collapse of major financial institutions that failed or would have failed if not for exceptional assistance from the government."News Dissector DANNY SCHECHTER is a journalist, blogger and filmmaker. He has been reporting on economic crises since the 1980's when he was with ABC News. His film In Debt We Trust warned of the economic meltdown in 2006. He has since written three books on the subject including Plunder: Investigating Our Economic Calamity (Cosimo Books, 2008), and The Crime Of Our Time: Why Wall Street Is Not Too Big to Jail (Disinfo Books, 2011), a companion to his latest film Plunder The Crime Of Our Time. He can be reached online at www.newsdissector.com.
| Author | : Board of Governors of the Federal Reserve System |
| Publisher | : |
| Total Pages | : 0 |
| Release | : 2002 |
| Genre | : Banks and Banking |
| ISBN | : 9780894991967 |
Provides an in-depth overview of the Federal Reserve System, including information about monetary policy and the economy, the Federal Reserve in the international sphere, supervision and regulation, consumer and community affairs and services offered by Reserve Banks. Contains several appendixes, including a brief explanation of Federal Reserve regulations, a glossary of terms, and a list of additional publications.
| Author | : |
| Publisher | : |
| Total Pages | : 12 |
| Release | : 1988 |
| Genre | : Income tax |
| ISBN | : |
| Author | : Angus Deaton |
| Publisher | : Princeton University Press |
| Total Pages | : 392 |
| Release | : 2024-05-21 |
| Genre | : Business & Economics |
| ISBN | : 0691259259 |
A Nobel Prize–winning economist tells the remarkable story of how the world has grown healthier, wealthier, but also more unequal over the past two and half centuries The world is a better place than it used to be. People are healthier, wealthier, and live longer. Yet the escapes from destitution by so many has left gaping inequalities between people and nations. In The Great Escape, Nobel Prize–winning economist Angus Deaton—one of the foremost experts on economic development and on poverty—tells the remarkable story of how, beginning 250 years ago, some parts of the world experienced sustained progress, opening up gaps and setting the stage for today's disproportionately unequal world. Deaton takes an in-depth look at the historical and ongoing patterns behind the health and wealth of nations, and addresses what needs to be done to help those left behind. Deaton describes vast innovations and wrenching setbacks: the successes of antibiotics, pest control, vaccinations, and clean water on the one hand, and disastrous famines and the HIV/AIDS epidemic on the other. He examines the United States, a nation that has prospered but is today experiencing slower growth and increasing inequality. He also considers how economic growth in India and China has improved the lives of more than a billion people. Deaton argues that international aid has been ineffective and even harmful. He suggests alternative efforts—including reforming incentives to drug companies and lifting trade restrictions—that will allow the developing world to bring about its own Great Escape. Demonstrating how changes in health and living standards have transformed our lives, The Great Escape is a powerful guide to addressing the well-being of all nations.
