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Bundled Forecasts in Empirical Accounting Research

69 Pages Posted: 17 May 2006 Last revised: 20 Jun 2012

Jonathan L. Rogers

University of Colorado at Boulder - Leeds School of Business

Andrew Van Buskirk

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

Date Written: June 13, 2011

Abstract

This paper examines “bundled” forecasts, or management earnings forecasts issued concurrently with earnings announcements, which have evolved to become the most common type of management forecast. We describe the econometric problems associated with measuring bundled forecast news and, in particular, provide evidence that the measurement error in the traditional calculation of forecast news is material and is systematically associated with variables frequently studied in forecast-related research. We illustrate an application of conditional expectations to overcome these problems. Finally, we offer guidance and caveats to researchers considering the use of this method in the future.

Keywords: Management Forecasts, conference calls, Regulation FD, earnings announcements

JEL Classification: M41, M45, D82, G14

Suggested Citation

Rogers, Jonathan L. and Van Buskirk, Andrew, Bundled Forecasts in Empirical Accounting Research (June 13, 2011). Journal of Accounting & Economics (JAE), Forthcoming; Chicago Booth Research Paper No. 09-37. Available at SSRN: https://ssrn.com/abstract=901837 or http://dx.doi.org/10.2139/ssrn.901837

Jonathan L. Rogers

University of Colorado at Boulder - Leeds School of Business ( email )

419 UCB
Boulder, CO 80309-0419
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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