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
Citation
BROWN, Lawrence; HUGON, Artur; and LU, Hai.
Brokerage industry self-regulation: The case of analysts’ background disclosures. (2009). Contemporary Accounting Research. 27, (4), 1025-1062. Research Collection School Of Accountancy.
Available at: https://ink.library.smu.edu.sg/soa_research/1577
Creative Commons License
This work is licensed under a Creative Commons Attribution-Noncommercial-No Derivative Works 4.0 License.
Additional URL
http://doi.org./10.1111/j.1911-3846.2010.01035.x