2010
The demand for corporate financial reporting: A survey among financial analysts
Publication
Publication
Abstract: We examine financial analysts’ views on corporate financial reporting issues by means of a survey among 306 analysts and interviews among 21 analysts and compare their views with that of CFOs. Since CFOs believe that meeting or beating analysts’ forecasts and managing earnings to achieve this benchmark can enhance firm value, examining analysts’ perspectives on these actions improves our understanding on whether CFOs’ beliefs are rational or heuristic. Our findings suggest that CFOs’ beliefs tend to be rational regarding their focus on earnings and their views on earnings management and smoothing. The main reason is that analysts have difficulty in unraveling certain types of earnings management in a specific firm even though they anticipate earnings management in general. Yet, CFOs are heuristic in their optimism about the consequences of managing earnings, which potentially has negative implications for the value of their firm.
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| Organisation | Erasmus Research Institute of Management |
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de Jong, A., Mertens, G., van der Poel, M., & van Dijk, R. (2010). The demand for corporate financial reporting: A survey among financial analysts. Retrieved from http://hdl.handle.net/1765/31623 |
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