Management Earnings Forecasts and Other Forward-Looking Statements

60 Pages Posted: 15 Aug 2012 Last revised: 1 Jun 2018

See all articles by Zahn Bozanic

Zahn Bozanic

Florida State University

Darren T. Roulstone

Ohio State University (OSU) - Fisher College of Business

Andrew Van Buskirk

Ohio State University (OSU) - Department of Accounting & Management Information Systems

Date Written: July 10, 2017

Abstract

We identify forward-looking statements (FLS) in firms’ disclosures to distinguish between “forecast-like” (quantitative statements about earnings) and “other”, or non-forecast-like, FLS. We show that, like earnings forecasts, other FLS generate significant investor and analyst responses. Unlike earnings forecasts, other FLS are issued more frequently when uncertainty is higher. We then show that earnings-related FLS are more sensitive to uncertainty than quantitative statements, suggesting that managers are more likely to alter the content than the form of FLS when uncertainty is higher. Our study indicates that incorporating other FLS into empirical measures provides a more comprehensive proxy for firms’ voluntary disclosures.

Keywords: Earnings Announcements, Voluntary Disclosure, Management Forecasts, Qualitative Disclosures

JEL Classification: D8, M4

Suggested Citation

Bozanic, Zahn and Roulstone, Darren T. and Van Buskirk, Andrew, Management Earnings Forecasts and Other Forward-Looking Statements (July 10, 2017). Journal of Accounting and Economics, 2018, Vol. 65(1), 1-20, Available at SSRN: https://ssrn.com/abstract=2130145 or http://dx.doi.org/10.2139/ssrn.2130145

Zahn Bozanic

Florida State University ( email )

Tallahasse, FL 32306
United States

Darren T. Roulstone

Ohio State University (OSU) - Fisher College of Business ( email )

2100 Neil Avenue
Columbus, OH 43210-1144
United States

Andrew Van Buskirk (Contact Author)

Ohio State University (OSU) - Department of Accounting & Management Information Systems ( email )

2100 Neil Avenue
Columbus, OH 43210
United States

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