Publication Type

Journal Article

Publication Date

11-2009

Abstract

We evaluate an industry disclosure initiative designed to inform investors, the practice of providing information regarding investment professionals’ backgrounds. Implicit in the motivation for this initiative is the presumed relevance of background information to investors seeking investment professionals’ guidance. We find that analysts with disclosure incidents forecast less accurately than a matched sample of analysts without such disclosures, and that the market views disclosed analysts’ earnings forecasts as less credible than those of the matched sample. Our evidence is consistent with disclosures signaling a persistent analyst characteristic. We conclude that analyst backgrounds are informative regarding both the accuracy and credibility of their earnings forecasts, and that investors who are uninformed as to an analyst’s background can benefit from these disclosures.

Keywords

Analysts, earnings forecasts, professionalism, self-regulation

Discipline

Accounting | Industrial Organization

Publication

Contemporary Accounting Research

Volume

27

Issue

4

First Page

1025

Last Page

1062

ISSN

0823-9150

Identifier

10.1111/j.1911-3846.2010.01035.x

Publisher

Canadian Academic Accounting Association

Additional URL

http://doi.org./10.1111/j.1911-3846.2010.01035.x

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