The Accounting Review Vol. 85 No. 6 2010
Once Bitten, Twice Shy: The Relation between Outcomes of Earnings Guidance and Management Guidance Strategy
Abstract
We examine how management quarterly guidance strategy is affected by various outcomes from previously issued guidance. We find that managers are less likely to provide quarterly earnings guidance for a given year when past management forecasts have been overly optimistic, when past forecasts were unsuccessful at influencing analysts’ expectations, when past forecasts failed to reduce information asymmetry, and when past forecasts resulted in earnings disappointments. For firms that continue to give guidance, adverse prior outcomes also affect the precision of future guidance and the number of quarters within a year for which they give guidance.
- DOI
- 10.2308/accr.2010.85.6.1951
- Volume
- 85
- Issue
- 6
- Pages
- 1951-1984
- Language
- en
- Sources
- openalex bibtex:phds-export.bib crossref