TY - JOUR
T1 - Managerial tools used to meet or beat analyst forecasts
T2 - Evidence from the UK
AU - Al Mabsali, Yousuf Khamis Hamed
AU - Hayward, Rob
AU - Eliwa, Yasser
PY - 2021/3/16
Y1 - 2021/3/16
N2 - This paper examines the tools that managers use to meet or beat analyst forecasts in the post-International Financial Reporting Standards (IFRS) period, using a sample of UK firms for the period 2005 to 2015. Our results are consistent with the view that managers utilize both classification shifting and managerial guidance to hit analyst forecasts. The results suggest that managers are more likely to continue to exercise their discretion in using these two tools following the adoption of IFRS. This paper supports the argument that managers engage in classification shifting, and IFRS adoption is more likely to increase market demand for more disclosuresthrough managerial guidance. In contrast, there is weak evidence to suggest that real earnings management or accrual earnings management are used to hit analyst forecasts. Our results are expected to be of interest to policymakers, regulators, and external auditors
AB - This paper examines the tools that managers use to meet or beat analyst forecasts in the post-International Financial Reporting Standards (IFRS) period, using a sample of UK firms for the period 2005 to 2015. Our results are consistent with the view that managers utilize both classification shifting and managerial guidance to hit analyst forecasts. The results suggest that managers are more likely to continue to exercise their discretion in using these two tools following the adoption of IFRS. This paper supports the argument that managers engage in classification shifting, and IFRS adoption is more likely to increase market demand for more disclosuresthrough managerial guidance. In contrast, there is weak evidence to suggest that real earnings management or accrual earnings management are used to hit analyst forecasts. Our results are expected to be of interest to policymakers, regulators, and external auditors
KW - Earnings managementManagerial toolsHitting analyst forecastsManagerial guidance
KW - Managerial tools
KW - Managerial guidance
KW - Hitting analyst forecasts
KW - Earnings management
UR - http://www.scopus.com/inward/record.url?scp=85103372771&partnerID=8YFLogxK
U2 - 10.1016/j.intaccaudtax.2021.100383
DO - 10.1016/j.intaccaudtax.2021.100383
M3 - Article
VL - 43
JO - Journal of International Accounting, Auditing and Taxation
JF - Journal of International Accounting, Auditing and Taxation
SN - 1061-9518
M1 - 100383
ER -