Auditor Changes By The Firms Just Missing Analysts Forecasts PDF Download
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Author | : Yaou Zhou |
Publisher | : |
Total Pages | : 78 |
Release | : 2018 |
Genre | : Accounting |
ISBN | : |
Download Auditor Changes by the Firms Just Missing Analysts’ Forecasts Book in PDF, ePub and Kindle
This study explores a unique setting to examine whether firms tend to change their auditors when their annually reported EPS "just misses" the most recent consensus analysts' forecasts (i.e., within one cent). I find that firms just missing the consensus analysts' forecasts are more likely to switch their auditors than their peer firms. Furthermore, these just-missing firms tend to switch to a more flexible auditor and have lower earnings quality than their peer firms after making the auditor switch, suggesting some opportunism in their switching behavior. In contrast with most opinion shopping literature, this "just-miss" setting allows me to test an implicit form of opportunistic auditor switching behavior -- the shopping of auditors' styles rather than their opinions. The results taken together indicate that firms can successfully shop for a more lenient auditor when the incumbent possibly constrains their ability to meet or beat the earnings target. This also provides empirical evidence in support of DeFond and Zhang (2014)'s argument that opinion shopping may occur in forms other than the reduction of going-concern opinions and still reflect an impairment of auditor independence/quality.
Author | : Krishnagopal Menon |
Publisher | : |
Total Pages | : 0 |
Release | : 2008 |
Genre | : |
ISBN | : |
Download Former Audit Partners and Abnormal Accruals Book in PDF, ePub and Kindle
Audit clients often employ a former partner of their present auditor as an officer or a director. This "revolving door" practice presents a potential threat to auditor independence. Using the Jones (1991) model to calculate abnormal accruals for firms in 1998 and 1999, we find that firms employing former partners as officers or directors report larger signed and unsigned abnormal accruals than other firms, after controlling for other factors that plausibly affect abnormal accruals. To ensure that the results are not driven by performance characteristics of the former partner firms, we construct a performance-matched control sample and obtain consistent results. We also observe a disproportionately higher (lower) proportion of former partner firms than expected just meeting (missing) analysts' earnings forecasts.
Author | : Donald K. McConnell |
Publisher | : |
Total Pages | : 344 |
Release | : 1983 |
Genre | : Business & Economics |
ISBN | : |
Download Public Company Auditor Changes and Big Eight Firms Book in PDF, ePub and Kindle
Author | : Sudipta Basu |
Publisher | : |
Total Pages | : 25 |
Release | : 2014 |
Genre | : |
ISBN | : |
Download Auditor Conservatism and Analysts' Fourth Quarter Earnings Forecasts Book in PDF, ePub and Kindle
We argue that accounting conservatism makes earnings forecasting difficult by introducing transitory components in reported earnings. These transitory components are likely to be disproportionately represented in firms reporting losses. We show that analysts' mean forecast errors and absolute forecast errors for loss firms are substantially greater than those for profit firms in every single quarter, regardless of the forecast horizon. We argue that auditors' legal liability incentives make it likely that fourth quarter earnings are more conservative than interim quarter earnings. Forecast errors are always higher for loss firms in the fourth quarter compared to earlier quarters. Using special items to proxy for transitory components induced by conservatism, we document similar results for firms reporting special items, partitioned by the sign of the special items. Our results are consistent with auditor conservatism affecting fourth quarter earnings differentially, which causes analysts' earnings forecasts to be poorest for the fourth quarter.
Author | : Yin Yen William Foo |
Publisher | : |
Total Pages | : 32 |
Release | : 2014 |
Genre | : Auditing |
ISBN | : |
Download Auditors' Response to Analysts' Forecast Properties Book in PDF, ePub and Kindle
This study draws on information asymmetry theory and audit pricing theory to examine the linkage between analysts' earnings forecast properties and audit pricing in the US. To test these associations information asymmetry is measured by (1) analysts' forecast accuracy, and (2) analysts' forecast dispersion. This study provides evidence that higher analyst earnings forecast accuracy (dispersion) are associated with lower (higher) audit fee pricing. Our interpretation of these results are that analysts, as important financial intermediaries, provide useful information to other third parties, including auditors. We find that these relationships are stronger for small firms and younger firms in line with these firms having higher informational problems, and that audit firm industry specialization plays a significant role in reducing information asymmetry.
Author | : |
Publisher | : |
Total Pages | : 540 |
Release | : 2008 |
Genre | : Auditing |
ISBN | : |
Download Auditing Book in PDF, ePub and Kindle
Author | : Junxiong Fang |
Publisher | : |
Total Pages | : 63 |
Release | : 2020 |
Genre | : |
ISBN | : |
Download Common Individual Auditors and Analyst Forecast Performance Book in PDF, ePub and Kindle
We examine the importance of analysts covering firms with common audit partners to analyst earnings forecast performance (hereafter, we term the analyst, auditor, and the firm as being “common”). We find that analysts issue more accurate and less optimistically biased earnings forecasts for firms with common audit partners than other analysts following the same firm without common audit partners. Consistent with expectations, we identify auditors' style in making audit judgments as the channel through which analysts accumulate better information from covering firms with common audit partners. In a series of cross-sectional analyses, we find that this result is stronger when: (1) analysts suffer from poor direct access to firm-specific information from managers; (2) the information value from common auditors is higher, evident in their clients having more opaque operations, more difficult-to-forecast earnings, and greater stock price synchronicity; and (3) the quality of information that analysts elicit from auditors is higher, evident in auditors belonging to a large audit firm. Our results are robust to different approaches for addressing the potential endogeneity of analysts' coverage decisions.
Author | : John Hasseldine |
Publisher | : Emerald Group Publishing |
Total Pages | : 157 |
Release | : 2023-06-16 |
Genre | : Business & Economics |
ISBN | : 1837533628 |
Download Advances in Taxation Book in PDF, ePub and Kindle
In the latest volume of Advances in Taxation, editor John Hasseldine includes studies from expert contributors to explore topics such as: the stock market reaction to the Tax Cuts and Jobs Act; strategic repatriations made by firms; and corporate social responsibility and tax planning.
Author | : Joshua Ronen |
Publisher | : Springer Science & Business Media |
Total Pages | : 587 |
Release | : 2008-08-06 |
Genre | : Business & Economics |
ISBN | : 0387257713 |
Download Earnings Management Book in PDF, ePub and Kindle
This book is a study of earnings management, aimed at scholars and professionals in accounting, finance, economics, and law. The authors address research questions including: Why are earnings so important that firms feel compelled to manipulate them? What set of circumstances will induce earnings management? How will the interaction among management, boards of directors, investors, employees, suppliers, customers and regulators affect earnings management? How to design empirical research addressing earnings management? What are the limitations and strengths of current empirical models?
Author | : Amy Yunzhi Zang |
Publisher | : ProQuest |
Total Pages | : 120 |
Release | : 2000 |
Genre | : |
ISBN | : 9780549163251 |
Download Evidence on the Tradeoff Between Real Manipulation and Accrual Manipulation: to 25; Pages:26 to 50; Pages:51 to 75; Pages:76 to 100; Pages:101 to 120 Book in PDF, ePub and Kindle