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Are More Able Managers Good Future Tellers? Learning from Japan
| Content Provider | Scilit |
|---|---|
| Author | Ishida, Souhei Kochiyama, Takuma Shuto, Akinobu |
| Copyright Year | 2018 |
| Description | Journal: SSRN Electronic Journal Baik, Farber, and Lee (2011) document that high-ability managers are more likely to generate accurate management earnings forecasts. Focusing on Japan, where management earnings forecast is effectively mandated, we extend the study by examining (1) whether the relationship between manager ability and forecast accuracy is unique to the disclosure system in the United States where management earnings forecasts are voluntarily released, and (2) how high-ability managers increase their earnings forecast accuracy. We find that managerial ability is negatively associated with forecast errors based on initial forecasts, suggesting that high-ability managers are more likely to issue accurate forecasts at the fiscal year beginning. We then provide evidence that high-ability managers are less likely to revise their initial earnings forecasts. Finally, we show that high-ability managers are less likely to adopt earnings management to improve their accuracy in management earnings forecasts. Evidence shows that while high-ability managers are more likely to issue accurate initial management forecasts, low-ability managers are more likely to adopt revisions and earnings management to reduce their forecast errors. |
| Related Links | https://www.carf.e.u-tokyo.ac.jp/admin/wp-content/uploads/2018/05/F435.pdf https://papers.ssrn.com/sol3/Delivery.cfm?abstractid=3176576 |
| ISSN | 10914358 |
| e-ISSN | 15565068 |
| DOI | 10.2139/ssrn.3176576 |
| Journal | SSRN Electronic Journal |
| Language | English |
| Publisher | Elsevier BV |
| Publisher Date | 2018-05-10 |
| Access Restriction | Open |
| Subject Keyword | Journal: SSRN Electronic Journal Applied Ethics Managerial Ability Management Earnings Forecast Forecasts Accuracy Earnings Management |
| Content Type | Text |
| Resource Type | Article |
| Subject | Public Health, Environmental and Occupational Health Psychiatry and Mental Health |
