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Article: Analyst forecast errors and stock-price behavior near the earnings announcement dates of LIFO adopters

TitleAnalyst forecast errors and stock-price behavior near the earnings announcement dates of LIFO adopters
Authors
Issue Date1988
Citation
Journal Of Accounting Research, 1988, v. 26 n. 2, p. 169-194 How to Cite?
AbstractRicks [1982] found that stock returns near the earnings disclosure dates of 1974 LIFO adopters were negative and significantly lower than returns near the earnings disclosure dates of firms not using LIFO. Given that firms adopting LIFO in 1974 were voluntarily switching to an accounting method providing often significant tax savings, it is not obvious why investors would have reacted negatively. Nor is it likely that investors were unaware of many of the firms' LIFO adoption decisions. This study presents evidence suggesting that the negative excess returns observed by Ricks [1982] were associated with, and possibly due to, analysts' systematic overestimates of earnings of firms adopting LIFO in 1974. We are aware of no previous study documenting systematic errors in analysts' earnings forecasts conditional on a voluntary accounting method change.
Persistent Identifierhttp://hdl.handle.net/10722/128990
ISSN
2015 Impact Factor: 2.243
2015 SCImago Journal Rankings: 5.733
SSRN
ISI Accession Number ID
References

 

DC FieldValueLanguage
dc.contributor.authorBiddle, GCen_US
dc.contributor.authorRicks, WEen_US
dc.date.accessioned2010-12-09T03:05:29Z-
dc.date.available2010-12-09T03:05:29Z-
dc.date.issued1988en_US
dc.identifier.citationJournal Of Accounting Research, 1988, v. 26 n. 2, p. 169-194en_US
dc.identifier.issn0021-8456en_US
dc.identifier.urihttp://hdl.handle.net/10722/128990-
dc.description.abstractRicks [1982] found that stock returns near the earnings disclosure dates of 1974 LIFO adopters were negative and significantly lower than returns near the earnings disclosure dates of firms not using LIFO. Given that firms adopting LIFO in 1974 were voluntarily switching to an accounting method providing often significant tax savings, it is not obvious why investors would have reacted negatively. Nor is it likely that investors were unaware of many of the firms' LIFO adoption decisions. This study presents evidence suggesting that the negative excess returns observed by Ricks [1982] were associated with, and possibly due to, analysts' systematic overestimates of earnings of firms adopting LIFO in 1974. We are aware of no previous study documenting systematic errors in analysts' earnings forecasts conditional on a voluntary accounting method change.-
dc.languageengen_US
dc.relation.ispartofJournal Of Accounting Researchen_US
dc.titleAnalyst forecast errors and stock-price behavior near the earnings announcement dates of LIFO adoptersen_US
dc.typeArticleen_US
dc.identifier.openurlhttp://library.hku.hk:4550/resserv?sid=HKU:IR&issn=0021-8456&volume=26&spage=169&epage=&date=1988&atitle=ANALYST+FORECAST+ERRORS+AND+STOCK-PRICE+BEHAVIOR+NEAR+THE+EARNINGS+ANNOUNCEMENT+DATES+OF+LIFO+ADOPTERSen_US
dc.identifier.emailBiddle, GC:biddle@hku.hken_US
dc.identifier.authorityBiddle, GC=rp00230en_US
dc.description.naturelink_to_subscribed_fulltexten_US
dc.identifier.doi10.2307/2491101-
dc.relation.referenceshttp://apps.isiknowledge.com/CitedRefList.do?product=WOS&search_mode=CitedRefList&db_id=WOS&UT=A1988R608600001en_US
dc.identifier.volume26en_US
dc.identifier.issue2en_US
dc.identifier.spage169en_US
dc.identifier.epage194en_US
dc.identifier.isiWOS:A1988R608600001en_US
dc.identifier.ssrn1679627-

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