Impact of Error of Prior-Period Earnings Forecast on Market Reaction to Management Earnings Forecast, and Different Types of Earnings Management

The objective of this research is to investigate the reaction of market to the companies’ bad or good news, according to their earnings forecast in the last year, the managers’ inclination to keep or improve their fame in forecasting, and comparing managers' inclination towards upward earnings...

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Autores principales:	Ahmad Khodamipour, Hojat Hosseninasab, Hosein Hayati
Formato:	article
Lenguaje:	FA
Publicado:	Shahid Bahonar University of Kerman 2015
Materias:	management earnings forecast market reaction earnings management earnings forecast news content Accounting. Bookkeeping HF5601-5689
Acceso en línea:	https://doaj.org/article/a711561bf7624c2bb10b4e4b4af3b6a4
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spelling	oai:doaj.org-article:a711561bf7624c2bb10b4e4b4af3b6a42021-11-04T19:47:54ZImpact of Error of Prior-Period Earnings Forecast on Market Reaction to Management Earnings Forecast, and Different Types of Earnings Management2008-89142476-292X10.22103/jak.2015.988https://doaj.org/article/a711561bf7624c2bb10b4e4b4af3b6a42015-09-01T00:00:00Zhttps://jak.uk.ac.ir/article_988_5a3336999c84127fd8c65d9f7d72abff.pdfhttps://doaj.org/toc/2008-8914https://doaj.org/toc/2476-292XThe objective of this research is to investigate the reaction of market to the companies’ bad or good news, according to their earnings forecast in the last year, the managers’ inclination to keep or improve their fame in forecasting, and comparing managers' inclination towards upward earnings management with different types of earnings management and with respect to their last year forecast. To achieve this, the financial statements of 86 companies listed in the Tehran Stock Exchange between the years 1384-1390 were analyzed. To reach the research objective, the companies were categorized according to their last and current year forecasts, and their forecast contents. Then, considering the combined structure of the data, and using the statistical tests as T test, correlative coefficient of Pierson, and OLS, the hypotheses of the research were tested. The results showed that the market reaction to the earnings forecast with good (bad) news, when the last period forecast was optimistic (pessimistic),is more positive (more negative) than when the last period forecastis pessimistic (optimistic). Also, the results showed managers tend to be stable in earnings forecast. Additionally, the results showed the last period optimistic forecast could be considered the factor leading to upward earnings management in the current period.Ahmad KhodamipourHojat HosseninasabHosein HayatiShahid Bahonar University of Kermanarticlemanagement earnings forecastmarket reactionearnings managementearnings forecast news contentAccounting. BookkeepingHF5601-5689FAمجله دانش حسابداری, Vol 6, Iss 21, Pp 87-112 (2015)
institution	DOAJ
collection	DOAJ
language	FA
topic	management earnings forecast market reaction earnings management earnings forecast news content Accounting. Bookkeeping HF5601-5689
spellingShingle	management earnings forecast market reaction earnings management earnings forecast news content Accounting. Bookkeeping HF5601-5689 Ahmad Khodamipour Hojat Hosseninasab Hosein Hayati Impact of Error of Prior-Period Earnings Forecast on Market Reaction to Management Earnings Forecast, and Different Types of Earnings Management
description	The objective of this research is to investigate the reaction of market to the companies’ bad or good news, according to their earnings forecast in the last year, the managers’ inclination to keep or improve their fame in forecasting, and comparing managers' inclination towards upward earnings management with different types of earnings management and with respect to their last year forecast. To achieve this, the financial statements of 86 companies listed in the Tehran Stock Exchange between the years 1384-1390 were analyzed. To reach the research objective, the companies were categorized according to their last and current year forecasts, and their forecast contents. Then, considering the combined structure of the data, and using the statistical tests as T test, correlative coefficient of Pierson, and OLS, the hypotheses of the research were tested. The results showed that the market reaction to the earnings forecast with good (bad) news, when the last period forecast was optimistic (pessimistic),is more positive (more negative) than when the last period forecastis pessimistic (optimistic). Also, the results showed managers tend to be stable in earnings forecast. Additionally, the results showed the last period optimistic forecast could be considered the factor leading to upward earnings management in the current period.
format	article
author	Ahmad Khodamipour Hojat Hosseninasab Hosein Hayati
author_facet	Ahmad Khodamipour Hojat Hosseninasab Hosein Hayati
author_sort	Ahmad Khodamipour
title	Impact of Error of Prior-Period Earnings Forecast on Market Reaction to Management Earnings Forecast, and Different Types of Earnings Management
title_short	Impact of Error of Prior-Period Earnings Forecast on Market Reaction to Management Earnings Forecast, and Different Types of Earnings Management
title_full	Impact of Error of Prior-Period Earnings Forecast on Market Reaction to Management Earnings Forecast, and Different Types of Earnings Management
title_fullStr	Impact of Error of Prior-Period Earnings Forecast on Market Reaction to Management Earnings Forecast, and Different Types of Earnings Management
title_full_unstemmed	Impact of Error of Prior-Period Earnings Forecast on Market Reaction to Management Earnings Forecast, and Different Types of Earnings Management
title_sort	impact of error of prior-period earnings forecast on market reaction to management earnings forecast, and different types of earnings management
publisher	Shahid Bahonar University of Kerman
publishDate	2015
url	https://doaj.org/article/a711561bf7624c2bb10b4e4b4af3b6a4
work_keys_str_mv	AT ahmadkhodamipour impactoferrorofpriorperiodearningsforecastonmarketreactiontomanagementearningsforecastanddifferenttypesofearningsmanagement AT hojathosseninasab impactoferrorofpriorperiodearningsforecastonmarketreactiontomanagementearningsforecastanddifferenttypesofearningsmanagement AT hoseinhayati impactoferrorofpriorperiodearningsforecastonmarketreactiontomanagementearningsforecastanddifferenttypesofearningsmanagement
_version_	1718444610999549952

Impact of Error of Prior-Period Earnings Forecast on Market Reaction to Management Earnings Forecast, and Different Types of Earnings Management

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