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The Relation Between a Prior Earnings Forecast by Management and Analyst Response to a Current Management Forecast.

Patricia Williams

Fordham University 1

The Accounting Review 1996

Abstract This paper investigates whether the accuracy of a prior earnings forecast by management serves as an indicator to analysts of the believability of a current management forecast. Regression analysis is used to examine the relationship between the usefulness of a prior forecast by management and analyst response to a current forecast, after controlling for other determinants of believability. The results suggest that management establishes a forecasting "reputation" based on prior earnings forecasts.

DOI
10.2308/tar-9602190351
Volume
71 (1)
Pages
103-115
Language
en
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