The Accounting Review Vol. 59 No. 4 1984

Bond Raters' Use of Management Financial Forecasters: Experiment in Expert Judgment.

Paul Danos¹; Doris L. Holt²; Eugene A. Imhoff³

¹ Professor of Accounting, University of Michigan 1 · ² Assistant Professor of Accounting, University of Minnesota. 2 · ³ Ernst & Whinney Professor of Accounting, University of Michigan. 3

Abstract

Bond raters are unique in their exposure to management forecasts. They regularly review ratees' confidential forecasts for new and ongoing bond issues. This study gives evidence that bond raters have developed great sensitivity to subtle differences in forecasts-supporting the inferences that forecasts are used in the rating process and that the rating environment fosters expertise development. In experiments which measured responses to confirming and disconfirming evidence (in the form of various forecast trends), bond raters changed their evaluations of ratees when forecast data were introduced. These results are consistent with bond raters having developed sharply defined knowledge structures (schemata) through their information exposure, feedback, and reward systems. In addition, bond raters demonstrated the other expertise attributes of high levels of consensus and confidence.

DOI

10.2308/tar-4483119

Volume

59

Issue

4

Pages

547-573

Language

en

Sources

openalex crossref

Cite

APA 7 MLA 9 Chicago (author–date) Harvard Elsevier Harvard (JFE, JBF…) The Accounting Review Academy of Management American Marketing Association INFORMS (Management Science) Copy citation Copied ✓