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Article: Managers' EPS forecasts: Nickeling and diming the market?
Title | Managers' EPS forecasts: Nickeling and diming the market? |
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Authors | |
Keywords | Management earnings forecasts Proprietary information costs Voluntary disclosure Keyword Heaping |
Issue Date | 2010 |
Citation | Accounting Review, 2010, v. 85, n. 1, p. 63-95 How to Cite? |
Abstract | Nearly half of managers' forecasts of annual earnings per share (EPS) end in nickel intervals, whereas only about 20 percent of actual EPS end in nickel intervals. We provide evidence on the attributes, determinants, and consequences of this systematic wedge between managers' predictions and firms' ex posf actual performance. Managers' nickel forecasts are not simply a benign response to uncertainty about upcoming earnings, because nickel forecasts are not only less accurate, but also they are more optimistically biased than non-nickel forecasts. In addition to uncertainty, efforts to protect the firm's proprietary information and self-serving opportunism in response to managers' economic incentives also play incremental roles in explaining managers' propensity to issue forecasts heaped at nickel intervals. We also find that managers' nickel forecasts spur even active analysts to issue forecasts heaped at nickel intervals, although analysts' forecast revisionspartially adjust for the optimism and noise in managers' nickel forecasts. |
Persistent Identifier | http://hdl.handle.net/10722/238069 |
ISSN | 2023 Impact Factor: 4.4 2023 SCImago Journal Rankings: 4.640 |
ISI Accession Number ID |
DC Field | Value | Language |
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dc.contributor.author | Bamber, Linda Smith | - |
dc.contributor.author | Hui, Kai Wai | - |
dc.contributor.author | Yeung, P. Eric | - |
dc.date.accessioned | 2017-02-03T02:12:46Z | - |
dc.date.available | 2017-02-03T02:12:46Z | - |
dc.date.issued | 2010 | - |
dc.identifier.citation | Accounting Review, 2010, v. 85, n. 1, p. 63-95 | - |
dc.identifier.issn | 0001-4826 | - |
dc.identifier.uri | http://hdl.handle.net/10722/238069 | - |
dc.description.abstract | Nearly half of managers' forecasts of annual earnings per share (EPS) end in nickel intervals, whereas only about 20 percent of actual EPS end in nickel intervals. We provide evidence on the attributes, determinants, and consequences of this systematic wedge between managers' predictions and firms' ex posf actual performance. Managers' nickel forecasts are not simply a benign response to uncertainty about upcoming earnings, because nickel forecasts are not only less accurate, but also they are more optimistically biased than non-nickel forecasts. In addition to uncertainty, efforts to protect the firm's proprietary information and self-serving opportunism in response to managers' economic incentives also play incremental roles in explaining managers' propensity to issue forecasts heaped at nickel intervals. We also find that managers' nickel forecasts spur even active analysts to issue forecasts heaped at nickel intervals, although analysts' forecast revisionspartially adjust for the optimism and noise in managers' nickel forecasts. | - |
dc.language | eng | - |
dc.relation.ispartof | Accounting Review | - |
dc.subject | Management earnings forecasts | - |
dc.subject | Proprietary information costs | - |
dc.subject | Voluntary disclosure | - |
dc.subject | Keyword | - |
dc.subject | Heaping | - |
dc.title | Managers' EPS forecasts: Nickeling and diming the market? | - |
dc.type | Article | - |
dc.description.nature | link_to_subscribed_fulltext | - |
dc.identifier.doi | 10.2308/accr.2010.85.1.63 | - |
dc.identifier.scopus | eid_2-s2.0-77149131543 | - |
dc.identifier.volume | 85 | - |
dc.identifier.issue | 1 | - |
dc.identifier.spage | 63 | - |
dc.identifier.epage | 95 | - |
dc.identifier.isi | WOS:000273022800003 | - |
dc.identifier.issnl | 0001-4826 | - |