The power of crowds: can minority shareholder activism promote management earnings forecast accuracy

2021 ◽  
Author(s):  
Yinju Nie ◽  
Ming Jia
Keyword(s):  
Forecast Accuracy ◽  
Shareholder Activism ◽  
Minority Shareholder ◽  
Earnings Forecast ◽  
Management Earnings Forecast

scholarly journals Management Earnings Forecast And Earnings Management: Does Prior-Period Forecast Accuracy Play A Role?

2013 ◽  
Vol 11 (3) ◽  
pp. 147 ◽  
Author(s):  
Jing-Wen Yang
Keyword(s):  
Earnings Management ◽  
Forecast Accuracy ◽  
Earnings Forecasts ◽  
Bad News ◽  
Earnings Forecast ◽  
Font Size ◽  
Management Earnings Forecast ◽  
Different Levels

<span style="font-family: Times New Roman; font-size: small;"> </span><p style="margin: 0in 0.5in 0pt; text-align: justify; mso-pagination: none;" class="MsoNormal"><span style="font-size: 10pt;"><span style="font-family: Times New Roman;">This study aims at examining 1) whether the market reacts differently in response to the same news, but based on different levels of accuracy from prior earnings forecasts; 2) whether managers tend to maintain or change their reputations for being optimistic or pessimistic in their forecasts; and 3) whether managers manage current earnings numbers in order to maintain or change their reputations for optimistic or pessimistic forecasting. Based on t-tests and the Wilcoxon rank-signed test, it was discovered that the market reacts more positively (negatively) on good (bad) news with a pessimistic (optimistic) prior earnings forecast. Further, when a firm is pessimistic in its forecasts, it tends to stay pessimistic, but when a firm has a reputation for optimistic forecasts, it does not appear to change that reputation. A firm with an optimistic prior forecast is more likely to manage earnings upwards by influencing one of the following: increasing total accruals, boosting inventory levels, or lowering discretionary expenses.</span></span></p><span style="font-family: Times New Roman; font-size: small;"> </span>

Do Director Networks Help Managers Forecast Better?

2021 ◽  
Author(s):  
Mario Schabus
Keyword(s):  
Decision Making ◽  
Forecast Accuracy ◽  
Listed Companies ◽  
Earnings Forecast ◽  
Management Forecasts ◽  
Access To Information ◽  
Board Interlocks ◽  
Management Earnings Forecast ◽  
Decision Making Processes ◽  
Insight Into

I examine whether directors' superior access to information through their board network improves the accuracy of firms' forecasting. Managers may benefit from well-connected directors (i.e., board centrality) as they may have limited insight into market developments or decision-making processes of other firms beyond knowledge specific to their firm. Employing a sample of U.S.-listed companies, I separately examine the effect of within-firm variation in direct and indirect board connections on management earnings forecast accuracy. The study contributes by showing that higher-degree connections can have an economically significant effect on the accuracy of management forecasts, regardless of firms' board interlocks. Further analyses point toward well-connected directors' ability to provide managers with valuable advice in a forecasting context, which complements directors' more extensively studied role in preventing managerial expropriation.

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