The Impact of Electronic Commerce Assurance on Financial Analysts' Earnings Forecasts and Stock Price Estimates (Retracted)

2000 ◽  
Vol 19 (s-1) ◽  
pp. 5-22 ◽  
Author(s):  
James E. Hunton ◽  
Tanya Benford ◽  
Vicky Arnold ◽  
Steve G. Sutton
Keyword(s):  
Electronic Commerce ◽  
Stock Price ◽  
Financial Analysts ◽  
Earnings Forecasts ◽  
Second Phase ◽  
Market Participants ◽  
Information Hypothesis ◽  
Risk Condition ◽  
The Impact ◽  
Significant Interaction Term

The objective of this study is to assess the impact of electronic commerce (EC) assurance on earnings forecasts and stock price estimates of financial analysts. The theoretical foundation of the current study is based on the information hypothesis (Fama and Laffer 1971; Wallace 1980), which supports the notion that EC assurance is a means of reducing information asymmetry and uncertainty for financial market participants. In the first phase of this study, a survey of 37 financial analysts indicates the importance of vendor- and outcome-based risk factors when forecasting the financial performance of firms engaged in EC. In the second phase, 87 analysts participate in a 2(high and low vendor-based risk)×2(high and low outcome-based risk) experiment. As hypothesized, EC assurance significantly increases earnings forecasts and stock price estimates in the high-risk, as compared to the low-risk, condition. In addition, a significant interaction term is obtained such that EC assurance yields a pronounced impact when both vendor- and outcome-based risks are high. The findings suggest that EC assurance reduces risk for market participants, thereby generating higher expectations of firm performance and value.

Discussion: “Dispersion in Analysts' Earnings Forecasts as a Measure of Uncertainty”

1998 ◽  
Vol 13 (3) ◽  
pp. 271-274 ◽  
Author(s):  
Lawrence D. Brown
Keyword(s):  
Stock Price ◽  
Annual Report ◽  
Earnings Forecasts ◽  
Analyst Forecast ◽  
Earnings Forecast ◽  
Data Set ◽  
Forecast Dispersion ◽  
Forecast Revision ◽  
Analyst Earnings ◽  
The Impact

This paper tackles an interesting question; namely, whether dispersion in analysts' earnings forecasts reflects uncertainty about firms' future economic performance. It improves on the extant literature in three ways. First, it uses detailed analyst earnings forecast data to estimate analyst forecast dispersion and revision. The contrasting evidence of Morse, Stephan, and Stice (1991) and Brown and Han (1992), who respectively used consensus and detailed analyst data to examine the impact of earnings announcements on forecast dispersion, suggest that detailed data are preferable for determining the data set on which analysts' forecasts are conditioned. Second, it relates forecast dispersion to both analyst earnings forecast revision and stock price reaction to the subsequent earnings announcement. Previous studies related forecast dispersion to either analyst forecast revision (e.g., Stickel 1989) or to subsequent stock price movements (e.g., Daley et al. [1988]), but not to both revision and returns. Third, it includes the interim quarters along with the annual report. In contrast, previous research focused on the annual report, ignoring the interims (Daley et al. [1988]).

Beyond earnings: do EBITDA reporting and governance matter for market participants?

2017 ◽  
Vol 43 (2) ◽  
pp. 193-211 ◽  
Author(s):  
Denis Cormier ◽  
Samira Demaria ◽  
Michel Magnan
Keyword(s):  
Corporate Governance ◽  
Information Asymmetry ◽  
Stock Price ◽  
Value Relevance ◽  
Earnings Quality ◽  
Predictive Ability ◽  
Cash Flows ◽  
Content Type ◽  
Market Participants ◽  
The Impact

Purpose The purpose of this paper is to investigate whether formally disclosing an earnings before interests, taxes, depreciation, and amortization (EBITDA) number reduces the information asymmetry between managers and investors beyond the release of GAAP earnings. The paper also assess if EBITDA disclosure enhances the value relevance and the predictive ability of earnings. Design/methodology/approach The authors explore the interface between GAAP and non-GAAP reporting as well as the impact of corporate governance on the quality of non-GAAP measures. Findings Results suggest that EBITDA reporting is associated with greater analyst following and with less information asymmetry. The authors also document that EBITDA reporting enhances the positive relationship between earnings and stock pricing as well as future cash flows. Moreover, it appears that corporate governance substitutes for EBITDA reporting for stock markets. Hence, EBITDA helps market participants to better assess earnings valuation when a firm’s governance is weak. Inversely, when governance is strong, releasing EBITDA information has a much smaller impact on the earnings-stock price relation. Originality/value The authors revisit the issue of how corporate governance relates with earnings quality by considering the potentially confounding effect of EBITDA reporting; it appears that such reporting substitutes for governance in moderating the relation between governance and earnings quality.

scholarly journals REAKSI PASAR MODAL DARI DAMPAK PERISTIWA BOM PLAZA SARINAH TERHADAP ABNORMAL RETURN PERUSAHAAN LQ 45 YANG TERDAFTAR DI BEI

2016 ◽  
Vol 1 (2) ◽  
pp. 126-133
Author(s):  
Ika Yustina Rahmawati ◽  
Tiara Pandansari
Keyword(s):  
Event Study ◽  
Stock Price ◽  
Abnormal Return ◽  
Secondary Data ◽  
Market Participants ◽  
Average Abnormal Return ◽  
Closing Price ◽  
Current Events ◽  
The Impact ◽  
Observation Period

The purpose of this study was to analyze the reaction of the capital market from the impact of the bombing in Jakarta Sarinah Plaza, which will be indicated by the presence or absence of abnormal return. the sample used is the stock of LQ 45, this study is event study so that the observation period will see the reaction on before, during and after the event. In this study period used was H-5 (before the event), H0 (current events) and H + 5 (after the event). Sources of data obtained from yahoo finance, sahamok.com and IDX. The data used in this research is secondary data, such as the closing price of shares has been adjusted (adjusted closing price) and the closing price of IHSG. Data in the form of daily stock price. The data was then analyzed using analytical methods paired sample t-test. The results showed that when viewed from the average abnormal return (AAR) did not show any difference, only the H+3 and H+4 which shows the differences in AAR and signaled their reaction to the stock market to these events that affect market participants in make decisions. Keywords: Average Abnormal Return (AAR), event study, Bomb Sarinah Plaza.

scholarly journals Impact of Twitter Sentiment Related to Bitcoin on Stock Price Returns

2020 ◽  
Vol 26 (6) ◽  
pp. 60-71
Author(s):  
Feda Hassan Jahjah ◽  
Muhanad Rajab
Keyword(s):  
Exchange Rate ◽  
Financial Markets ◽  
Stock Price ◽  
Second Phase ◽  
Digital Currency ◽  
Two Phases ◽  
Negative Sentiment ◽  
The Impact ◽  
Deep Learning Model ◽  
Positive Effect

Twitter is becoming an increasingly popular platform used by financial analysts to monitor and forecast financial markets. In this paper we investigate the impact of the sentiments expressed in Twitter on the subsequent market movement, specifically the bitcoin exchange rate. This study is divided into two phases, the first phase is sentiment analysis, and the second phase is correlation and regression. We analyzed tweets associated with the Bitcoin in order to determine if the user’s sentiment contained within those tweets reflects the exchange rate of the currency. The sentiment of users over a 2-month period is classified as having a positive or negative sentiment of the digital currency using the proposed CNN-LSTM deep learning model. By applying Pearson's correlation, we found that the sentiment of the day (d) had a positive effect on the future Bitcoin returns on the next day (d+1). The prediction accuracy of the linear regression model for the next day's revenue was 78%.

Information Transfer of Bankruptcy Announcements: Examining the Impact of Auditor Opinions

2019 ◽  
Vol 34 (1) ◽  
pp. 45-66
Author(s):  
Jeffrey R. Casterella ◽  
Rosemond Desir ◽  
Matthew A. Stallings ◽  
James S. Wainberg
Keyword(s):  
Capital Market ◽  
Stock Price ◽  
Information Transfer ◽  
Data Availability ◽  
Going Concern ◽  
Market Participants ◽  
Audit Firms ◽  
Peer Firms ◽  
Going Concern Opinion ◽  
The Impact

SYNOPSIS Auditing standards require auditors to consider whether there is “substantial doubt” that their client will remain a going concern and to, accordingly, modify the audit report (PCAOB AS 2415). Prior research reports larger negative excess returns for bankrupt firms when bankruptcies occur without a prior going concern opinion. We investigate whether such audit opinions can also have an impact on industry peer firms. We find that peer firms experience significantly larger negative stock price drops when rivals' bankruptcies are not preceded by a going concern opinion. In addition, we find evidence of incremental stock price declines for peer firms when Big N audit firms fail to issue a going concern opinion. These findings should be of significant interest to regulators, auditors, and capital market participants as they serve to enhance our current understanding of the importance of going concern opinions for the share pricing of industry peer firms. JEL Classifications: G14; G33; M4; M42. Data Availability: All data are from public sources identified in the manuscript.

scholarly journals Analyst coverage and future stock price crash risk

2019 ◽  
Vol 20 (1) ◽  
pp. 63-77 ◽  
Author(s):  
Guanming He ◽  
Lu Bai ◽  
Helen Mengbing Ren
Keyword(s):  
Stock Price ◽  
Risk Measure ◽  
Investment Decision ◽  
Financial Analysts ◽  
Crash Risk ◽  
Analyst Coverage ◽  
Content Type ◽  
Information Intermediaries ◽  
Investment Decision Making ◽  
The Impact

Purpose Whether financial analysts play an effective role as information intermediaries and monitors has triggered a wide spread of debate among academics and practitioners to date. The purpose of this paper is to complement this debate by investigating the association between analyst coverage and firm-specific future stock price crash risk. Design/methodology/approach Regression analysis is based on a large sample of US public firms and the crash risk measure of Hutton et al. (2009). Potential endogeneity concerns are alleviated by restricting the sample period to the post-Regulation-FD period and conducting an analysis of the impact threshold for a confounding variable method per Larcker and Rusticus (2010). Findings Evidence reveals that a high level of analyst coverage is associated with lower future stock price crash risk. Furthermore, the negative association between analyst coverage and stock price crash risk is stronger for firms that have high financial opacity. Additionally, analyst forecast pessimism is negatively associated with future crash risk. Research limitations/implications Our research provides evidence in support for the view that financial analysts play an active information intermediary role in a way that increases information transparency of a firm and reduces its crash risk. Also, our study offers support for the view that analysts perform an effective monitoring role in a way that constraints management’s bad news hoarding activities and reduces future crash risk. Practical implications This study is of interest to investors who seek analyst reports for their investment decision making and for information providers who demand external financing. The findings of this study also have some other important implications for practitioners, given the economic and welfare consequences of stock price crashes. Originality/value This study offers support for the view that analysts serve positive roles as information intermediaries and monitors in the US stock market.

scholarly journals Dampak Penerapan PSBB Covid-19 dan Harga Saham LQ-45 di Bursa Efek Indonesia (BEI)

2021 ◽  
Vol 4 (2) ◽  
pp. 149
Author(s):  
Putry Jecuinna ◽  
Ariel Zielma
Keyword(s):  
Comparative Study ◽  
Stock Price ◽  
Share Price ◽  
Lower Percentage ◽  
Second Phase ◽  
Share Prices ◽  
Wait And See ◽  
The Government ◽  
The Impact ◽  
To Receive

AbstrakTujuan penelitian ini yang telah dibahas untuk mengkaji dampak pandemi Covid-19 dan PSBB pada perkembangan pasar modal di Indonesia khususnya LQ-45.Metode penelitian yang digunakan dalam penelitian ini adalah kualitatif. Penelitian kualitatif bertujuan untuk memperoleh gambaran yang lengkap tentang berbagai hal berdasarkan perspektif manusia. Penelitian ini adalah penelitian yang bersifat komparatif. Penelitian dengan menggunakan studi perbandingan (comparative study) dilakukan dengan cara membandingkan persamaan dan perbedaan. PSBB tahap pertama dilakukan Maret 2020 berdampak pada penurunan harga saham, dimana pemegang saham melakukan panic selling. PSBB tahap pertama kurang efektif dengan meningkatnya kasus positif di Indonesia, maka pemerintah menerapkan PSBB tahap kedua. Dalam kondisi ini pemegang shaam lebih siap dalam menerima informasi tersebut. Pemegang saham dalam menghadapi situasi ini saham mengambil sikap wait and see. Harga saham mengalami penurunan namun dengan presentase yang lebih rendah dibandingkan dengan PSBB tahap pertama. Kata kunci: Covid-19, harga saham, LQ-45, PSBBAbstractThe purpose of this research which has been discussed is to examine the impact of the Covid-19 pandemic and Pembatasan Sosial Skala Besar (PSBB) on the development of the capital market in Indonesia, especially LQ-45. The research method used in this research is qualitative. Qualitative research aims to obtain a complete picture of various things from a human perspective. This research is a comparative research. Research using a comparative study is performed by comparing the similarities and differences. The first phase of the PSBB was carried out in March 2020, impacts on the decline in share prices, which shareholders conducted panic selling. The first phase of the PSBB was less effective as the increasing number of positive cases in Indonesia, so the government implemented the second phase of the PSBB. In this condition, the shareholders are better prepared to receive the information. Shareholders in dealing with this situation took a wait and see attitude. The share price has decreased with a lower percentage compared to the first phase of the PSBB..Keywords: Covid-19, Stock Price, LQ-45, PSBB

scholarly journals The Role Of Earnings Quality In Financial Analyst Forecast Accuracy

2013 ◽  
Vol 30 (1) ◽  
pp. 255 ◽  
Author(s):  
David Salerno
Keyword(s):  
Earnings Quality ◽  
Financial Analysts ◽  
Forecast Accuracy ◽  
Earnings Forecasts ◽  
Cash Flows ◽  
Analyst Forecast ◽  
Financial Reports ◽  
The Individual ◽  
Reported Earnings ◽  
The Impact

This study investigates the impact that the quality of reported earnings has on the accuracy of financial analysts earnings forecasts. Extant research indicates that earnings attributes are important considerations to users of accounting information. One such attribute is earnings quality; often measured as the magnitude of accruals that do not convert to cash in a timely manner, where a poor match of cash flows and accruals indicates low earnings quality. Such accruals could reduce the usefulness of financial reports. This study uses two measurements of forecast accuracy to assess the impact that earnings quality has on the forecast accuracy of financial analysts. Following prior research, one measurement considers the environment in which the analyst operates and compares their accuracy to that of their peers. The second compares the individual analyst forecast to the actual reported earnings. For both measurements of accuracy the results show that higher earnings quality is associated with improved forecast accuracy.

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