The Predictive Ability of Quarterly Financial Statements

A fundamental role of financial reporting is to provide information useful in forecasting future cash flows. Applying up-to-date time series modelling techniques, this study provides direct evidence on the usefulness quarterly data predicting operating Moreover, we show that predictive gain from using larger for asset-heavy industries and with higher levels earnings smoothness. This contributes accounting literature by examining statements realization Our results help fill gap knowledge new insights why frequency matters. In addition, our findings have important policy implications ongoing debate over interim requirements multiple jurisdictions around world.