Online Appendix for: Management of Reported and Forecast EPS, Investor Responses, and Research Implications

Management Science, Forthcoming

11 Pages Posted: 26 Jul 2017

See all articles by Foong Soon Cheong

Foong Soon Cheong

Nanyang Technological University (NTU) - Division of Accounting

Jacob K. Thomas

Yale School of Management

Date Written: March 27, 2017

Abstract

This is the Online Appendix for: Management of reported and forecast EPS, investor responses, and research implications (Management Science, Forthcoming).

We provide here additional results relating to four issues discussed in the main paper:

a) robustness analysis regarding prediction P3.2, which compares the use of accruals by US and Japanese firms to smooth reported EPS;

b) robustness analysis regarding prediction P3.3, which compares ERC or investor responses to forecast errors for US and Japanese firms;

c) an extension of the analyses in Table 5 of the main paper, relating to replications of Thomas (2002); and

d) descriptive results relating to scale variation in the first moment of forecast error distributions, referred to as CT#1.

While we present results for all four analyses, we provide no discussion for the third issue, as it is fully described in the main paper.

Keywords: EPS forecast errors, earnings management, forecast guidance, scale deflation, and earnings response coefficients

JEL Classification: G14, G34, M41

Suggested Citation

Cheong, Foong Soon and Thomas, Jacob Kandathil, Online Appendix for: Management of Reported and Forecast EPS, Investor Responses, and Research Implications (March 27, 2017). Management Science, Forthcoming. Available at SSRN: https://ssrn.com/abstract=3007209

Foong Soon Cheong

Nanyang Technological University (NTU) - Division of Accounting ( email )

Nanyang Business School
Singapore, 639798
Singapore

Jacob Kandathil Thomas (Contact Author)

Yale School of Management ( email )

135 Prospect Street
P.O. Box 208200
New Haven, CT 06520-8200
United States

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