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Articles 1 - 8 of 8
Full-Text Articles in Accounting
Are All Management Earnings Forecasts Created Equal? Expectations Management Versus Communication, Yongtae Kim, Myung Seok Park
Are All Management Earnings Forecasts Created Equal? Expectations Management Versus Communication, Yongtae Kim, Myung Seok Park
Accounting
Recent studies associate management earnings forecasts (MEFs) with expectations management. These studies, however, neither provide evidence on the extent and scope of expectations management through MEFs nor consider alternative incentives for issuing MEFs. Consequently, existing evidence does not help regulators assess whether MEFs effectively facilitate communication with investors. We investigate to what extent managers exploit their earnings forecasts as a tool of expectations management or as a communication device. By examining relations among MEFs, analysts' forecasts, and actual earnings, we classify MEFs into three incentive categories: (1) expectations management, (2) communication, and (3) other incentives. We find that a significant …
Analyst Vs. Market Forecasts Of Earnings Management To Avoid Small Losses, Michael Eames, Yongtae Kim
Analyst Vs. Market Forecasts Of Earnings Management To Avoid Small Losses, Michael Eames, Yongtae Kim
Accounting
Burgstahler and Eames (2003) present evidence that analysts commonly anticipate earnings management to avoid small losses, but often incorrectly predict its occurrence. Here we consider whether the market's behavior mimics that of analysts. Our results suggest that analysts exhibit more forecast optimism in their zero earnings forecasts than in their other small earnings forecast levels, and markets exhibit less relative optimism at this point. At the 271-360 day forecast horizon, we find a reduction in the earnings response coefficient at analysts' zero earnings forecasts and interpret this as reflecting less optimism in market earnings forecasts than in analyst forecasts when …
Perspectives On Eventual Ifrs Adoption, Annette Or
Perspectives On Eventual Ifrs Adoption, Annette Or
Accounting
Will the effects of eventual adoption of International Financial Reporting Standards (IFRS) be more positive or negative for practitioners and companies in the United States? How will IFRS affect stakeholders, including Chief Financial Officers (CFOs), investors, bankers, Chief Executive Officers (CEOs), chairmen, taxpayers, Certified Public Accountants (CPAs), and publicly traded companies? This paper will discuss the challenges faced, the opinions regarding the transition process, and the implications of IFRS implementation.
Auditor Size Vs. Audit Quality: An Analysis Of Auditor Switches, Jackie Weiner
Auditor Size Vs. Audit Quality: An Analysis Of Auditor Switches, Jackie Weiner
Accounting
In recent years, there has been a debate over whether public companies should be required to have either a mandatory retention period or a mandatory rotation period for their external auditors. With all of the financial scandals that occurred in the late 1990s and early 2000s, the idea of auditor switching has come to the forefront. There are some opponents to auditor switching when companies switch auditors due to opinion shopping. However, research has identified many other reasons for switching auditors, such as business growth or requirements for new audit procedures. When companies require more complex audits, it may become …
The Study On The Entry Mechanisms By Chinese Companies To The U.S. Market, Yingjie Zhang
The Study On The Entry Mechanisms By Chinese Companies To The U.S. Market, Yingjie Zhang
Accounting
These days, along with the rapid growth of China’s economy and active involvement around the world, We see booming Chinese companies traded on the international markets. This is an effective way for Chinese companies to raise worldwide capital. As more and more Chinese companies find their way to the U.S. market recently, they attract not only the investors’ attention but also the regulators’ attention. This paper examines the development of China’s economy and the Chinese companies on the U.S. market. It focuses on the three major entry mechanisms used by such companies.
The Debate Over The 150 Credit Requirement, Amy Wong
The Debate Over The 150 Credit Requirement, Amy Wong
Accounting
In 1983, Florida adopted a 150 credit hour rule in order for a CPA candidate to sit for the CPA exam. In 1989, the AICPA voted to recommend that all states follow Florida’s lead to adopt the 150-hour rule (Carpenter and Hock 2009). The events that led to the Sarbanes-Oxley Act of 2002 raise the question of just how helpful those extra credits are in improving the knowledge of accounting professionals in their field. A previous study has shown that the 150-hour requirement does not affect pass rates (Allen and Woodland 2006). Another study has shown that when there was …
Does Eliminating The Form 20-F Reconciliation From Ifrs To U.S. Gaap Have Capital Market Consequences?, Yongtae Kim, Haidan Li, Siqi Li
Does Eliminating The Form 20-F Reconciliation From Ifrs To U.S. Gaap Have Capital Market Consequences?, Yongtae Kim, Haidan Li, Siqi Li
Accounting
This paper investigates the capital market consequences of the SEC's decision to eliminate the reconciliation requirement for cross-listed companies following International Financial Reporting Standards (IFRS). We find no evidence that the elimination has a negative impact on firms' market liquidity or probability of informed trading (PIN). We also find no evidence of a significant impact on cost of equity, analyst forecasts, institutional ownership, stock price efficiency and synchronicity. Moreover, IFRS users do not increase disclosure frequency nor supply the reconciliation voluntarily. Our results do not support the argument that eliminating the reconciliation results in information loss or greater information asymmetry. …
Do Corporations Invest Enough In Environmental Responsibility?, Yongtae Kim, Meir Statman
Do Corporations Invest Enough In Environmental Responsibility?, Yongtae Kim, Meir Statman
Accounting
Proponents of corporate environmental responsibility argue that corporations shortchange shareholders by investing too little in environmental responsibility. They claim that corporations can improve their financial performance by increasing their investment in environmental responsibility. Opponents of corporate social responsibility argue that corporations shortchange shareholders by investing too much in environmental responsibility. They claim that corporations can improve their financial performance by reducing their investment in environmental responsibility. Yet others claim that corporations serve their shareholders well by investing just enough in social responsibility, not too little and not too much. If so, corporations increase their investment in environmental responsibility when an …