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Author: Mark H. Lang
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Languages : en
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This paper examines the relation between the disclosure practices of firms, the number of analysts following each firm, and properties of the analysts' earnings forecasts. Using data from the Financial Analysts Federation Corporate Information Committee Report (FAF Report), we provide evidence that firms with more informative disclosure policies have a larger analyst following, more accurate analyst earnings forecasts, less dispersion among individual analyst forecasts and less volatility in forecast revisions. The results enhance our understanding of the role of analysts in capital markets. Further, they suggest that potential benefits to disclosure include increased investor following, reduced estimation risk and reduced information asymmetry, each of which have been shown to reduce a firm's cost of capital in theoretical research.
Author: Mark H. Lang
Publisher:
ISBN:
Category :
Languages : en
Pages :
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This paper examines the relation between the disclosure practices of firms, the number of analysts following each firm, and properties of the analysts' earnings forecasts. Using data from the Financial Analysts Federation Corporate Information Committee Report (FAF Report), we provide evidence that firms with more informative disclosure policies have a larger analyst following, more accurate analyst earnings forecasts, less dispersion among individual analyst forecasts and less volatility in forecast revisions. The results enhance our understanding of the role of analysts in capital markets. Further, they suggest that potential benefits to disclosure include increased investor following, reduced estimation risk and reduced information asymmetry, each of which have been shown to reduce a firm's cost of capital in theoretical research.
Author: Philipp D. Schaberl
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Languages : en
Pages :
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More transparent disclosure reduces the effort required to process reported information. The adoption of Statement of Financial Accounting Standards (SFAS) No. 131, Disclosures about Segments of an Enterprise and Related Information, increased the transparency of segment information reported by diversified firms. Using a long sample window (1988-2007) and a difference-in-difference design, this paper examines the association between corporate diversification and analysts' efforts -- as reflected in analysts' idiosyncratic information precision and analyst consensus -- across the old SFAS No. 14 and the new SFAS No. 131 segment reporting regime. Results indicate that SFAS No. 131 has improved segment reporting such that analysts need to invest relatively less effort generating idiosyncratic information when issuing forecasts for diversified firms. Given that analysts' information gathering efforts are costly, these findings are of interest to policy makers when assessing whether the intended reporting objectives of SFAS No. 131 are being met in a cost effective manner.
Author: Chunlai Ye
Publisher:
ISBN:
Category :
Languages : en
Pages : 53
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Author: MARK LANG
Publisher:
ISBN:
Category :
Languages : en
Pages : 52
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Author: Yen-cheng Chang
Publisher:
ISBN:
Category : Disclosure of information
Languages : en
Pages : 60
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We show that U.S. analysts alter their forecasting behavior in response to a randomly assigned shock that exogenously varies the timeliness and cost of accessing companies' mandatory disclosures in the cross-section of investors: analysts reduce the number of stocks they cover, issue less optimistic and more accurate forecasts that are less bold, and collectively reduce forecast dispersion. Our investigation of possible channels favors the explanation that analysts reduce the strategic component of their behavior: the changes are more pronounced among analysts with stronger incentives to strategically skew their forecasts, such as affiliated analysts and those catering to retail investors. We conclude that mandatory disclosure is a substitute for information production by analysts, whose behavior is constrained by investors' ability to verify their forecasts using corporate filings.
Author: Faten Lakhal
Publisher:
ISBN:
Category :
Languages : en
Pages : 30
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The primary objective of this paper is to examine the relationships between voluntary earning disclosures made by French-listed firms and financial analysts' behavior. This paper focuses on voluntary earnings disclosures' contribution in explaining analysts' coverage and their earnings forecasts properties including forecast error and dispersion. We examine voluntary disclosures and analyst coverage as two decisions that could be endogenously determined. Our sample includes 154 French-listed firms from 1998 to 2001. Results using simultaneous equation model show that the disclosure decision influences and is not influenced by financial analysts' coverage, suggesting analysts choose to follow firms with high voluntary disclosure practices. Additional findings show that voluntary earnings disclosures are likely to improve analysts' forecasts accuracy and to reduce the dispersion among financial analysts' forecasts suggesting these disclosures reduce market uncertainty about forecasted earnings. These findings imply that corporate disclosure policy is helpful to financial analysts.
Author: Mark Harold Lang
Publisher:
ISBN:
Category :
Languages : en
Pages : 44
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Author: Ted Trautmann
Publisher: Wolters Kluwer
ISBN: 0808021583
Category : Reference
Languages : en
Pages : 3
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Book Description
Informal Corporate Disclosure Under Federal Securities Law, 2009 Editionexamines the regulation of informal disclosure -- e.g., press releases,speeches, analyst conference calls, webcasts, and investor roadshows -- asdistinguished from formal, highly structured disclosure in SEC filings. Thecoverage includes discussion of federal securities law, rules and courtdecisions; self-regulatory organization rules for listed companies, andstandards of practice prescribed by the National Investor RelationsInstitute (NIRI).This updated 2009 Edition includes:discussion of the SEC's recent guidance on the use of company web sites,including advice on the sufficiency of web site disclosure as a means ofdissemination under Regulation FD (see ¶1002)liability for hyperlinks to third-party information (see ¶1003)issues presented by the use of summaries and overviews (see ¶1004)concerns related to blogs and online discussion forums (see ¶1009)The new 2009 Edition also examines materiality principlesgoverning quantitative financial disclosures, specifically the recommendationsof the SEC Advisory Committee on Improvements to Financial Reporting,or CIFiR (see ¶¶403 and 1102). In addition, the work covers recentSEC Compliance and Disclosure Interpretations on the Form 8-K reportingobligation triggered by disclosure of certain financial information (see¶1105). Finally, the 2009 Edition includes discussion ofnew NIRI standards for quarterly earnings releases (see ¶1103), thetext of selected portions of those standards (see Appendix), and a timelinefor preparing an earnings release (see Appendix).
Author: Philipp D. Schaberl
Publisher:
ISBN:
Category :
Languages : en
Pages : 0
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Author: Ted Trautmann
Publisher:
ISBN:
Category : Disclosure of information
Languages : en
Pages : 296
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