Managers are in charge of the financial reporting process, they likely possess superior information regarding the firm’s operations and reporting policies.As such, we expect that managers have a better understanding than other market participants of the implications of the firm’s accounting conservatism for future earnings and, therefore, at least partially adjust their forecasts for the effect of conservatism. The present study investigate whether management earnings forecasts fully consider implications of accounting conservatism on actual earning. We also investigate forecast difficulty due greater earnings volatility and longer operating cycles as one of the possible reasons for managers’ failure to incorporate conservatism fully in their earnings forecasts. Our final sample consists of 86 companies listed in TES for fiscal years 2008-2012. Results also show negative association between conservatism and management forecast errors is stronger for firms with longer operating cycles, greater earnings volatility.
Khalifeh Soltani, S. A., & Ahmadi, N. (2015). The role of accounting conservatism in management earnings forecast bias. Accounting and Auditing Research, 7(26), 108-120. doi: 10.22034/iaar.2015.103910
MLA
Seyed Ahmad Khalifeh Soltani; Narges Ahmadi. "The role of accounting conservatism in management earnings forecast bias". Accounting and Auditing Research, 7, 26, 2015, 108-120. doi: 10.22034/iaar.2015.103910
HARVARD
Khalifeh Soltani, S. A., Ahmadi, N. (2015). 'The role of accounting conservatism in management earnings forecast bias', Accounting and Auditing Research, 7(26), pp. 108-120. doi: 10.22034/iaar.2015.103910
VANCOUVER
Khalifeh Soltani, S. A., Ahmadi, N. The role of accounting conservatism in management earnings forecast bias. Accounting and Auditing Research, 2015; 7(26): 108-120. doi: 10.22034/iaar.2015.103910
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