The Effects of Prompt Analyst Forecast Revision Reports on the Informativeness of Incentive-driven Voluntary Management Forecast Reports

UM > Faculty of Business Administration

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Status	即將出版Forthcoming
	The Effects of Prompt Analyst Forecast Revision Reports on the Informativeness of Incentive-driven Voluntary Management Forecast Reports
	ZHANG HAO 1; Can CHEN 1; Yonggen LUO 2
	2023-11
Publication Place	Journal of Accounting and Economics (under review)
Abstract	We investigate the effects of prompt analyst forecast revision reports (AFRRs) on the evidently informative and yet incentive-driven voluntary management forecast reports (VMFRs). The issuance of the prompt analyst revision immediately after the issuance of a VMFR itself indicates that the analyst must find the VMFR sufficiently credible and informative to have to revise his/her earlier forecast. We can thus rule out the case that the prompt AFRR can totally disagree with the VMFR because in that case there would be no prompt analyst revision and the earlier analyst forecast stands. Based on 23,367 VMFRs and their corresponding 24,829 prompt AFRRs, we first document that textual opinions expressed in these prompt AFRRs are more cautious (less optimistic) than those expressed in their corresponding incentive-driven VMFRs. We provide evidence that (1) although analysts may find certain incentive-driven voluntary disclosures sufficiently credible and informative to the extent that they choose to revise their earlier forecasts, they can nonetheless disagree with some aspects (textual or numerical) of the voluntary disclosures they already deem credible and (2) this partial disagreement or analyst interpretation explains and qualifies the voluntary self-disclosures and in so doing renders them more informative. We also find that both the explanation effect and the qualification effect of analyst interpretation in prompt AFRRs are stronger in VMFRs disclosing good textual news than those disclosing bad textual news.
Keyword	Prompt Analyst Forecast Revision Reports Voluntary Management Forecast Reports Analyst Textual Interpretation Aanalyst Numerical Interpretation Stock Market Reaction.
Language	英語English
Document Type	Report
Collection	Faculty of Business Administration
Corresponding Author	ZHANG HAO
Affiliation	1.University Of Macau 2.Guangzhou University
First Author Affilication	University of Macau
Recommended Citation GB/T 7714	ZHANG HAO,Can CHEN,Yonggen LUO. The Effects of Prompt Analyst Forecast Revision Reports on the Informativeness of Incentive-driven Voluntary Management Forecast Reports[R]. Journal of Accounting and Economics (under review), 2023.

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