Regulation Fair Disclosure And Analysts First Forecast Horizon PDF Download
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| Author | : Surya N. Janakiraman |
| Publisher | : |
| Total Pages | : 48 |
| Release | : 2006 |
| Genre | : |
| ISBN | : |
Download Regulation Fair Disclosure and Analysts' First-Forecast Horizon Book in PDF, ePub and Kindle
We examine the impact of Regulation Fair Disclosure (RFD) on first-forecast horizon of analysts' earnings forecasts. The first-forecast horizon is computed as the number of calendar days between the issue of the analysts' first earnings forecast for a quarter and the fiscal quarter-end date. We find that the first-forecast horizon has decreased by about 12 days after RFD: a 10 percent decrease. The top 25 percent of the analysts for each firm are classified as leaders based on the average first-forecast horizon over each year. Leaders are our proxy for favored analysts because obtaining private guidance before RFD would help such analysts provide forecasts earlier. We find that the first-forecast horizon of the leaders decreased by about 18 days, while that of the followers decreased by about 8 days, on average after RFD. This shows that the playing field has been made more level, in terms of eliminating the timing advantage that a select few analysts enjoyed prior to RFD. Specifically, the differential timing advantage between leaders and followers has decreased by about 10 days, out of a differential of 100 days prior to RFD.
| Author | : Lawrence D. Brown |
| Publisher | : |
| Total Pages | : 5 |
| Release | : 2014 |
| Genre | : |
| ISBN | : |
Download Discussion - Regulation Fair Disclosure and Analysts' First-Forecast Horizon Book in PDF, ePub and Kindle
Surya Janakiraman, Suresh Radhakrishnan, and Rafal Szwejkowski (2007), hereafter JRS, examine the impact of regulation fair disclosure (RFD) on the number of days between analysts' first earnings forecasts for the quarter and the fiscal quarter-end (first-forecast horizon). JRS conclude that the first-forecast horizon decreased by twelve days post-RFD; it decreased for both analysts whose average annual first-forecast horizon put them in the top 25 percent for each firm (designated by JRS as leaders) and the bottom 25 percent for each firm (designated by JRS as followers); and it decreased about the same amount for both leaders and followers. JRS interpret their results as follows. RFD reduced the first-forecast horizon on average overall; it reduced the first-forecast horizon for both leaders and followers; and it did not eliminate the timing advantage of leaders versus followers. My discussion proceeds along the following lines. First, I examine whether RFD reduced the first-forecast horizon. Second, I examine whether RFD decreased the first-forecast horizon for both leaders and followers. Third, I examine whether RFD decreased the first-forecast horizon for leaders versus followers.
| Author | : Sami Keskek |
| Publisher | : |
| Total Pages | : 48 |
| Release | : 2017 |
| Genre | : |
| ISBN | : |
Download The Effects of Disclosure and Analyst Regulations on the Relevance of Analyst Characteristics for Explaining Analyst Forecast Accuracy Book in PDF, ePub and Kindle
We posit and find an effect of disclosure and analyst reporting regulations implemented from 2000 through 2003 (including Regulation Fair Disclosure, the Sarbanes-Oxley Act, and the Global Settlement Act) on the importance of analyst and forecast characteristics for analyst forecast accuracy. Following the enactment of these regulations, more experienced analysts and All-Star analysts do not maintain their superior forecast accuracy, and analysts employed by large brokerage houses perform worse than other analysts. In addition, we find a decrease in the importance of analyst effort, the number of industries and firms followed, days elapsed since the last forecast, and forecast horizon. While the importance of bold upward forecast revisions does not change, bold downward revisions lose their relevance for forecast accuracy after 2003. Finally, we find an increase in the important of prior forecast accuracy. We find that the importance of these characteristics varies with the precision of publicly available information. Specifically, the decrease in the importance of most analyst and forecast characteristics and the increase in the importance of prior forecast accuracy are greater when the precision of publicly available information is low. Overall, our results suggest that the positive effects of experience, effort, brokerage house size, and All-Star status on forecast accuracy in the pre-regulation period were because of the information advantages that these analysts enjoyed (rather than their ability to generate private information). In contrast, our results suggest that prior forecast accuracy is related to analysts' ability to generate private information.
| Author | : Anup Agrawal |
| Publisher | : |
| Total Pages | : |
| Release | : 2006 |
| Genre | : |
| ISBN | : |
Download Who is Afraid of Reg FD? The Behavior and Performance of Sell-Side Analysts Following the SEC's Fair Disclosure Rules Book in PDF, ePub and Kindle
This paper analyzes the impact of Regulation FD on the accuracy and dispersion of earnings forecasts made by sell-side equity analysts. Using a large sample of forecasts made over a nearly ten-year period surrounding FD's adoption, we uncover two main sets of findings. First, earnings forecasts become less accurate post-FD at the levels of both the individual analyst and the consensus. This effect is significantly larger for early forecasts than for late forecasts, and for smaller companies than for larger companies. Second, the dispersion in earnings forecasts across individual analysts following a company increases post-FD. This effect is also larger for early forecasts than for late forecasts, and it increases with the passage of time following FD's adoption. These results are quite robust to alternative empirical methodologies. Our findings suggest that there has been a reduction in both selective guidance and the quality of analyst forecasts post-FD.
| Author | : Sherry F. Li |
| Publisher | : |
| Total Pages | : 12 |
| Release | : 2014 |
| Genre | : |
| ISBN | : |
Download Analyst Reactions to Expectations Management in the Post-Regulation Fair Disclosure Period Book in PDF, ePub and Kindle
Using a uniquely hand-collected dataset, we examine how financial analysts react to expectations management in the post-Regulation Fair Disclosure (FD) period. We find evidence that management issues pessimistic public guidance to lower analysts' expectations to a beatable level in the new regulatory environment. Majority of the analysts revised their forecasts downward immediately (in terms of days rather than weeks) after the issuance of a pessimistic public guidance. The magnitude of the downward revision is significantly greater for firms that beat the expectations through managerial guidance than firms that beat the expectations without guidance. In addition, firms that beat analysts' expectations through pessimistic guidance are able to achieve a larger positive earnings surprise at the earnings announcement than the “legitimate beaters”
| Author | : Afshad J. Irani |
| Publisher | : |
| Total Pages | : 28 |
| Release | : 2003 |
| Genre | : |
| ISBN | : |
Download The Effect of Regulation Fair Disclosure on the Relevance of Conference Calls to Financial Analysts Book in PDF, ePub and Kindle
This study examines the effect of Regulation Fair Disclosure (FD) on the relevance of company-sponsored conference calls. Measuring relevance by a conference call's ability to improve analyst forecast accuracy and consensus, I find larger improvements in both variables during the period surrounding conference calls in the post-FD era versus the pre-FD era. These findings imply that in the post-FD era relatively more about a firm's upcoming earnings becomes known during conference calls, consistent with FD's success in eliminating selective disclosure.
| Author | : Juhyun Lee |
| Publisher | : |
| Total Pages | : 270 |
| Release | : 2010 |
| Genre | : |
| ISBN | : |
Download Selective Disclosure Book in PDF, ePub and Kindle
| Author | : Melvyn Teo |
| Publisher | : |
| Total Pages | : 47 |
| Release | : 2013 |
| Genre | : |
| ISBN | : |
Download Strategic Interactions between Sell-Side Analysts and the Firms They Cover Book in PDF, ePub and Kindle
How do firms balance their use of management access and investment banking when enticing analysts to bias their reports? Which analysts should investors trust? What are the main determinants of analysts' forecast biases and precisions? This paper develops an infinite-horizon, repeated game to explore these questions. We obtain closed-form solutions which offer new insights and explain recent empirical findings. First, we find that forecast precision is decreasing in the ability of the analyst's corporate finance department and in the flow of investment banking business generated by the firm. Hence, we posit that an analyst makes less precise estimates when she is affiliated with the lead underwriter or when she is covering glamour stocks. Second, we show why an investor with a long horizon should avoid the advice of analysts from reputable brokerages with successful corporate finance departments. This is true even when these analysts have high initial signal precisions. Third, we explain (i) why in the recent years, the biases of analysts in their annual earnings forecasts are increasing in the size of the firms they cover, (ii) why IPO underwriters are chosen based on the strength of their equity research departments, and (iii) why there is greater optimism for glamour stocks than for value stocks. Finally, we predict that the biases will be smaller under the SEC's Regulation Fair Disclosure.
| Author | : Carla Carnaghan |
| Publisher | : |
| Total Pages | : 44 |
| Release | : 2004 |
| Genre | : |
| ISBN | : |
Download The Effects of Regulation Fair Disclosure on Management Forecasts Book in PDF, ePub and Kindle
We examine management forecasts to determine whether Regulation Fair Disclosure has improved the quality and quantity of public disclosures. Management forecasts are voluntary, provide earnings guidance and are highly sought by investors and analysts. We find that the information disclosed by managers has improved in terms of frequency, specificity and verifiable information provided. We also find that Regulation Fair Disclosure has reduced information asymmetry, and information leakage prior to the release of the MEF. We find no evidence of greater returns volatility. Our results suggest that generally Regulation Fair Disclosure has achieved one of its stated goals of providing a more level playing field to all investors.
| Author | : Jan LaVern Williams |
| Publisher | : |
| Total Pages | : 254 |
| Release | : 2006 |
| Genre | : Corporations |
| ISBN | : |
Download An Empirical Examination of the Management Strategies Used by Firms to Meet Or Beat Analysts' Forecasts Book in PDF, ePub and Kindle
This study documents that the number of firms that MBE has declined in the early 2000s. Furthermore, the results of the study suggest that the market detects expectations management and applies a discount to firms that use this strategy to MBE. The findings also indicate that prior to Regulation Fair Disclosure, the market is surprised by earnings announcements and reacts differently to the strategies used to MBE. Subsequent to Regulation Fair Disclosure, however, the market is aware of downward expectations management and does not react differently to strategies used to MBE. This study contributes to the literature by using a sample that includes a post Regulation Fair Disclosure and Sarbanes-Oxley Act time period. It also extends the literature by jointly examining the market reaction to two strategies that previously had been examined independently. The results of this study are helpful to standard and policy setters who devise laws to improve financial reporting and investor confidence in the capital markets.-- Abstract.
