Forecasts and Earnings

Abstract:     
This paper examines the interaction between an analyst's disclosure and a manager's earnings report. We show how the nature of the analyst's information affects the quality of reported earnings. We also provide conditions for the analyst's disclosure to reduce the quality of investor information in total (i.e., from all sources). Finally, we offer some comparative static results pertaining to earnings quality and derive empirical predictions for short-window event studies and long-window association studies.

Number of Pages in PDF File: 37

JEL Classification: M41, M43, G14, G24, G29

working papers series