Skip navigation
Please use this identifier to cite or link to this item: http://hdl.handle.net/2451/27559
Title: Another Look at GAAP Versus The Street: An Empirical Assessment of Measurement Error Bias
Authors: Cohen, Daniel A.
Hann, Rebecca N
Ogneva, Maria
Keywords: capital markets;analyst forecasts;earnings response coefficients;GAAP earnings;Street earnings;measurement error
Issue Date: Nov-2006
Series/Report no.: Daniel A. Cohen-14
Abstract: Bradshaw and Sloan (2002) document a significant increase in the difference between the earnings response coefficients (ERCs) for GAAP and Street (I/B/E/S) earnings over the 1990s, suggesting that the market has become increasingly reliant or fixated on Street earnings. In this study we investigate whether, alternatively, an errors in variables problem caused by a mismatch between the definitions of realized and expected earnings drives the ERC divergence. Our findings suggest that results from conventional analyses of GAAP and Street ERCs, including the ERC divergence pattern, are significantly contaminated by measurement errors in earnings surprises.
URI: http://hdl.handle.net/2451/27559
Appears in Collections:Accounting Working Papers

Files in This Item:
File Description SizeFormat 
SSRN-id950609.pdf373.57 kBAdobe PDFView/Open


Items in FDA are protected by copyright, with all rights reserved, unless otherwise indicated.