scholarly journals The Association between Management Earnings Forecast Deviation, Earnings Management, and the Stock Prices: Evidence from the Emerging Markets

2021 ◽  
Vol 2 (1) ◽  
pp. 373-411
Author(s):  
salah Ali
Keyword(s):  
Emerging Markets ◽  
Earnings Management ◽  
Stock Prices ◽  
Earnings Forecast ◽  
Management Earnings Forecast

scholarly journals Management Earnings Forecast And Earnings Management: Does Prior-Period Forecast Accuracy Play A Role?

2013 ◽  
Vol 11 (3) ◽  
pp. 147 ◽  
Author(s):  
Jing-Wen Yang
Keyword(s):  
Earnings Management ◽  
Forecast Accuracy ◽  
Earnings Forecasts ◽  
Bad News ◽  
Earnings Forecast ◽  
Font Size ◽  
Management Earnings Forecast ◽  
Different Levels

<span style="font-family: Times New Roman; font-size: small;"> </span><p style="margin: 0in 0.5in 0pt; text-align: justify; mso-pagination: none;" class="MsoNormal"><span style="font-size: 10pt;"><span style="font-family: Times New Roman;">This study aims at examining 1) whether the market reacts differently in response to the same news, but based on different levels of accuracy from prior earnings forecasts; 2) whether managers tend to maintain or change their reputations for being optimistic or pessimistic in their forecasts; and 3) whether managers manage current earnings numbers in order to maintain or change their reputations for optimistic or pessimistic forecasting. Based on t-tests and the Wilcoxon rank-signed test, it was discovered that the market reacts more positively (negatively) on good (bad) news with a pessimistic (optimistic) prior earnings forecast. Further, when a firm is pessimistic in its forecasts, it tends to stay pessimistic, but when a firm has a reputation for optimistic forecasts, it does not appear to change that reputation. A firm with an optimistic prior forecast is more likely to manage earnings upwards by influencing one of the following: increasing total accruals, boosting inventory levels, or lowering discretionary expenses.</span></span></p><span style="font-family: Times New Roman; font-size: small;"> </span>

Do Stock Prices Influence Analysts' Earnings Forecasts?

2013 ◽  
Vol 26 (1) ◽  
pp. 85-108 ◽  
Author(s):  
Jeffrey S. Miller ◽  
Lisa M. Sedor
Keyword(s):  
Stock Prices ◽  
Stock Price ◽  
Financial Analysts ◽  
Earnings Forecasts ◽  
Data Availability ◽  
Earnings Forecast ◽  
Future Earnings ◽  
Management Earnings Forecast ◽  
Stock Price Reaction ◽  
Made In

ABSTRACT This study uses an experiment with professional financial analysts to examine whether stock prices influence analysts' earnings forecasts. The findings indicate that analysts' revised forecasts made in response to a management earnings forecast differ depending on the level of uncertainty communicated by management's guidance and the stock price reaction to it. Lower (higher) stock price leads to lower (higher) analysts' forecasts when uncertainty about future earnings is high, but not when uncertainty about future earnings is low. Overall, the evidence suggests that the documented association between prior security returns and analysts' earnings forecasts is due, at least in part, to the influence of stock price on analysts' earnings forecasts. Data Availability: Contact the authors.

Earnings management and ownership structure in emerging market

2017 ◽  
Vol 43 (10) ◽  
pp. 1117-1136 ◽  
Author(s):  
Naima Lassoued ◽  
Mouna Ben Rejeb Attia ◽  
Houda Sassi
Keyword(s):  
Emerging Markets ◽  
Earnings Management ◽  
Ownership Structure ◽  
Audit Quality ◽  
Emerging Market ◽  
Middle Eastern ◽  
Convincing Evidence ◽  
Loan Loss ◽  
African Countries ◽  
Content Type

Purpose The purpose of this paper is to investigate whether ownership structure affects earnings management in the banking industry of emerging markets. Design/methodology/approach The empirical study is conducted using a sample of 134 banks from 12 Middle Eastern and North African countries. Econometrically speaking, the study used a panel data regression analysis. Findings The authors found convincing evidence that banks with more concentrated ownership use discretionary loan loss provisions to manage their earnings. The authors also found that state and institutional owners encourage earnings management, while family owners reduce this practice. Practical implications The findings would be valuable for investors since they should take into account ownership structure in order to reach a better investment decision. Moreover, regulatory reforms in emerging markets should push for more transparency about ownership structure, high levels of supervision, and external audit quality. Originality/value This study presents international evidence on the prominent role of owners in earnings management in emerging markets with weak shareholder rights protection.

scholarly journals Earnings Management through Tax Reserves and Auditor-Provided Tax Services

2017 ◽  
Vol 6 (4) ◽  
pp. 217
Author(s):  
Chunlai Ye
Keyword(s):  
Earnings Management ◽  
Financial Reporting ◽  
Income Smoothing ◽  
Earnings Forecast ◽  
Large Firms ◽  
Fin 48 ◽  
Management Incentives ◽  
Consensus Forecasts ◽  
Earnings Smoothing ◽  
Tax Reserves

This study investigates whether firms continue to use tax reserves to achieve financial reporting objectives in the post-FIN 48 period and the effect of auditor-provided tax services on earnings management through tax reserves. Three types of earnings management incentives are considered in this study: meeting or beating the consensus forecasts, income smoothing, and taking an “earnings bath.” The analyses yield evidence that only non-large firms manipulate tax reserves to meet/beat earnings forecast in the post-FIN 48 period; however, tax reserves are still utilized by both large and non-large firms to smooth earnings. Moreover, evidence is provided that the auditor who provides more tax services facilitates large firms’ earnings smoothing in the post-FIN 48 period, implying independence impairment. But this behavior does not exist within non-large firms, arguably because the auditor does not compromise independence for less important clients.

scholarly journals Systematic illiquidity, characteristic illiquidity, and stock returns: Timeseries analysis

2022 ◽  
Vol 9 (2) ◽  
pp. 72-80
Author(s):  
Soltane et al. ◽  
Keyword(s):  
Emerging Markets ◽  
Stock Returns ◽  
Stock Prices ◽  
Stock Price ◽  
Stock Exchange ◽  
Systematic Risk ◽  
Timeseries Analysis ◽  
The Relationship

The objective of this research is to investigate the relationship between illiquidity and stock prices on the Tunisian stock exchange. While previous researches tended to focus on one form of illiquidity to examine this relationship, our study unifies three forms of illiquidity at the same time. Indeed, we simultaneously consider illiquidity as systematic risk, as a characteristic of the market, and as a characteristic of the stock. The aggregate illiquidity of the market is the average of individual stock illiquidity. The illiquidity risk is the sensitivity of the stock price to illiquidity shocks. Shocks of market illiquidity are estimated by the innovations in the expected market illiquidity. Results show that investors on the Tunisian stock exchange do not require higher returns when they expect a rise of market illiquidity, whereas investors on U.S markets are compensated for higher expected market illiquidity. In addition, shocks of market illiquidity provoke a fall in stock prices of small caps, while large caps are not sensitive to market illiquidity shocks. This differs slightly from results based on U.S. data where illiquidity shocks reduce all stock prices but most notably those of small caps. Robustness tests validate our findings. Our results are consistent with previous studies which reported that the “zero-return” ratio predicts significantly the return-illiquidity relationship on emerging markets.

scholarly journals The Effects from The U.S. and Japan to Emerging Stock Markets in Asia and Vietnam

2021 ◽  
Author(s):  
SDAG Lab
Keyword(s):  
Emerging Markets ◽  
Stock Prices ◽  
Stock Markets ◽  
Spillover Effect ◽  
Spillover Effects ◽  
The Philippines ◽  
Volatility Spillovers ◽  
Return Effect ◽  
Asian Emerging Markets ◽  
The U.S

The subprime mortgage crisis in the U.S. in mid-2008 suggests that stock prices volatility do spillover from one market to another after international stock markets downturn. The purpose of this paper is to examine the magnitude of return and volatility spillovers from developed markets (the U.S. and Japan) to eight emerging equity markets (India, China, Indonesia, Korea, Malaysia, the Philippines, Taiwan, Thailand) and Vietnam. Employing a mean and volatility spillover model that deals with the U.S. and Japan shocks and day effects as exogenous variables in ARMA(1,1), GARCH(1,1) for Asian emerging markets, the study finds some interesting findings. Firstly, the day effect is present on six out of nine studied markets, except for the Indian, Taiwanese and Philippine. Secondly, the results of return spillover confirm significant spillover effects across the markets with different magnitudes. Specifically, the U.S. exerts a stronger influence on the Malaysian, Philippine and Vietnamese market compared with Japan. In contrast, Japan has a higher spillover effect on the Chinese, Indian, Korea, and Thailand than the U.S. For the Indonesian market, the the return effect is equal. Finally, there is no evidence of a volatility effect of the U.S. and Japanese markets on the Asian emerging markets in this study.

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