Option informativeness before earnings announcements and under real activity manipulation
نویسندگان
چکیده
منابع مشابه
Trends in Earnings Management and Informativeness of Earnings Announcements in the Pre- and Post-Sarbanes Oxley Periods
We document that firms’ management of accounting earnings increased steadily from 1987 until the passage of the Sarbanes Oxley Act (SOX), with a significant increase during the period prior to SOX, followed by a significant decline after passage of SOX. However, the increase in earnings management preceding SOX was primarily in poorly performing industries. We also show that the informativeness...
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Firms scheduled to report earnings earn an annualized abnormal return of 9.9%. We propose a risk-based explanation for this phenomenon, in which investors use announcements to revise their expectations for non-announcing rms, but can only do so imperfectly. Consequently, the covariance between rm-speci c and market cash-ow news spikes around announcements, making announcers especially risky....
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متن کاملEarnings management through real activities manipulation
I find evidence consistent with managers manipulating real activities to avoid reporting annual losses. Specifically, I find evidence suggesting price discounts to temporarily increase sales, overproduction to report lower cost of goods sold, and reduction of discretionary expenditures to improve reported margins. Cross-sectional analysis reveals that these activities are less prevalent in the ...
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Theory suggests that managers issue earnings forecasts to reduce information asymmetry. An earnings forecast is more effective in reducing information asymmetry if it contains earnings news that is relatively more informative about the firm’s value. We hypothesize that a manager is more likely to issue an earnings forecast if investors perceive that earnings are more informative. We measure ear...
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ژورنال
عنوان ژورنال: Pacific Accounting Review
سال: 2021
ISSN: 0114-0582,0114-0582
DOI: 10.1108/par-07-2020-0090