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Accounting Working Papers >
Please use this identifier to cite or link to this item:
http://hdl.handle.net/2451/27568
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| Title: | Mechanisms to Meet/Beat Analyst Earnings Expectations in the Pre- and
Post-Sarbanes-Oxley Eras |
| Authors: | Bartov, Eli
Cohen, Daniel A. |
| Issue Date: | May-2007 |
| Series/Report no.: | Eli Bartov-08 |
| Abstract: | This paper asks two questions. First, has the prevalence of expectations
management to meet/beat analyst expectations changed in the aftermath of
the 2001-2002 accounting scandals and the passage of the 2002
Sarbanes-Oxley Act (SOX)? Second, has the mix among the three mechanisms
used for meeting earnings targets: accrual earnings management, real
earnings management, and earnings expectations management shifted in the
Post-SOX Period? We document that the propensity to meet/beat analyst
expectations has declined significantly in the Post-SOX Period. Our
primary findings explain this pattern. In particular, we find a decline
in the use of expectations management and accrual management, and no
change in real earnings management in the Post-SOX Period relative to
the preceding seven-year period. Our results are robust to controlling
for varying macro economic conditions. These findings contribute to the
academic literature, investors, and regulators. |
| URI: | http://hdl.handle.net/2451/27568 |
| Appears in Collections: | Accounting Working Papers
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