Recent research suggests that optimistically biased earnings forecasts issued by analysts are attributable to analysts minimizing symmetric, linear loss functions. We test an alternative explanation, namely that analysts have asymmetric loss functions. Theory predicts that if loss functions are asymmetric then forecast error bias depends on forecast error variance, but not necessarily on skewne...

earnings management has inverted the main objective of financial reporting through the distortion of the actual economic performance of companies and prevented the complete transfer of information to market. given the importance of subject of research, incentives that cause earnings management have been reviewed from various aspects. the main purpose of this research is to examine the relations...

While Wall Street closely watches financial analysts’ earnings forecasts, Main Street often scrutinizes product quality relative to competition. Do firms with superior product competitiveness enjoy greater likelihood of beating analyst earnings target? And if so, is there contingency in this impact? We show that positive changes in product competitiveness contribute to the firm’s likelihood of ...

This study investigates the association between the ownership structure of a firm and the accuracy of individual one-year-ahead earnings forecasts made by UK analysts. The relationship is explored in the presence of individual analyst and firm-specific characteristics using a research-tailored dataset comprising 11,659 individual analysts’ forecasts made over the period, 1996 to 2001. To addres...

I develop a model in which analysts strategically time and exaggerate their forecasts to convince the public that they are skilled. The model’s key predictions are that an analyst will tend to forecast later if he has a better ex ante reputation, and he will tend to forecast earlier if the quality of public information is lower. Using a database of individual analysts’ earnings forecasts, I emp...

This study examines the relation of corporate earnings management to firm size. We observe that firm size plays differing roles in earnings management: Small-sized firms engage in more earnings management to avoid reporting losses than largeor medium-sized firms. On the other hand, largeand medium-sized firms exhibit more aggressive earnings management to avoid reporting earnings decreases than...