The effect of ex ante earnings uncertainty on earnings response coefficients

Article Abstract:

The effect of ex ante earnings uncertainty is examined through an analysis of the linear relationship between unexpected stock returns (UR) and unexpected earnings (UE). Serving as the proxy for ex ante uncertainty is the variance in earnings forecasts of analysts immediately before disclosure of annual earnings. Data from 3,167 firms for the period 1979 to 1984 were used to investigate the linear relationship and consequently determine the systematic link between ex ante uncertainty and the information content of earnings. A such, high ex ante-displaying firms showed minimal or none existent price movement during earnings announcements. Sensitivity tests further indicate that these findings are independent of the quantity of information made avalailable on the firm and the firm's size.

Economic aspects, Influence, Financial statements, Disclosure statements (Accounting), Business forecasting

---

Self-selection bias and the economic consequences of accounting regulation: an application of two-stage switching regression to SFAS No. 2

Article Abstract:

The Statement of Financial Accounting Standards (SFAS) No. 2 is used as a case study to illustrate selection bias effects on economic conditions resulting from accounting regulations. A two-stage switching regression method is the method of estimation used to correct for self-selectivity. Results indicate that selection bias is present in both expensing and capitalizing groups. The Wald test is used to analyze structural modifications in the decision to invest in research and development (R&D). Tests illustrate that modifications observed in the post-1974 R&D spending behavior of capitalizers can be rooted partially to general macroeconomic changes.

Standards, Usage, Accounting, Investment analysis, Securities analysis, Regression analysis

---

The incremental information in SFAS No. 33 income disclosures over historical cost income and its cash and accrual components

Article Abstract:

The incremental information in the cash and accrual components of historical cost income are compared to the incremental information in the Statement of Financial Accounting Standards (SFAS) No. 33 measures of constant dollar and current cost operating income. The results indicate that constant dollar operating income measures and current cost income measures have incremental information over historical cost income and its accrual and cash components.

Accrual basis accounting, Cost accounting

Similar abstracts:

• Abstracts: The effect of ambiguity on loss contingency reporting judgments. Empirical accounting research design for Ph.D. students
• Abstracts: Three types of perceived uncertainty about the environment: state, effect, and response uncertainty. Searching for common threads: understanding the multiple effects of diversity in organizational groups
• Abstracts: The 'texture' of organizing in an Italian university department
• Abstracts: The challenge of cultural diversity: harnessing a diversity of views to understand multiculturalism. Congruence, contingency and theory building
• Abstracts: Estimating the managerial cost of operating a service department when reciprocal services exist. The executive compensation effects of equity-for-debt swaps

This website is not affiliated with document authors or copyright owners. This page is provided for informational purposes only. Unintentional errors are possible.