The Rewards to Meeting or Beating Earnings Expectations

By Eli Bartov, Dan Givoly, Carla K. Hayn. 2002

1,618 citations recorded by the source corpus.

Subfields: Accounting, Finance, Strategy and Management

View Paper: https://www.semanticscholar.org/paper/d1749049a43d0afa687f69364ac1f44641906972

How researchers see this paper

The researchers whose trusted networks rank it highest, strongest advocate first. Every researcher gets a different order.

In Accounting

1. Martin Walker
2. Shivaram Rajgopal
3. Terry Shevlin
4. Weili Ge
5. Daniel A. Cohen
6. Qiang Cheng
7. Amy Y. Zang
8. Sarah E. McVay

In Finance

1. Martin Walker
2. Shivaram Rajgopal
3. John (Xuefeng) Jiang
4. Daniel A. Cohen
5. Beatriz García Osma
6. Vasiliki Athanasakou
7. Qiang Cheng
8. Amy Y. Zang

In Strategy and Management

1. Martin Walker
2. Shivaram Rajgopal
3. Sarah E. McVay
4. Weili Ge
5. Daniel A. Cohen
6. Amy Y. Zang
7. Vasiliki Athanasakou
8. Terry Shevlin

Citations in the corpus

• Accrual-based and real earnings management and political connections (2015, background): “Managers of firms are aware of the rewards of meeting or beating earnings target which motivates them to choose among the alternatives earnings management strategies (Samuelson and Zeckhauser, 1988; Bartov et al., 2002).”
• Do the Big 4 and the Second-tier firms provide audits of similar quality? (2010, background): “Given managers’ incentives to manipulate reported earnings for private gain (such as executive compensation contracts) or to meet or beat earnings benchmarks (Bartov et al., 2002; Graham et al., 2005), investors may be expected to be uncertain as to whether or not the reported earnings are the outco”
• Earnings management and annual report readability (2017, positive): “The rewards of doing so are higher stock returns, lower information asymmetry, and lower cost of capital (Bartov et al., 2002; Brown et al., 2009).”
• Goals Gone Wild: The Systematic Side Effects of Overprescribing Goal Setting (2009, background): “expectations rather than maximize earnings ( Bartov, Givoly, & Hayn, 2002 ).”
• Ownership Structure and Earnings Management in Malaysian Listed Companies: The Size Effect (2008, background): “Prior research finds that effective corporate governance mechanisms (John & Senbet 1998; Klein 2002), quality external audits (Becker et al. 1998; Bartov et al. 2002), and managerial ownerships (Warfield et al. 1995) will reduce agency conflicts in firms.”
• The Spread of Aggressive Corporate Tax Reporting: A Detailed Examination of the Corporate-Owned Life Insurance Shelter (2011, background): “49 meeting/beating analysts’ forecasts (Bartov et al. 2002; Kasznik and McNichols 2002). Following Frank et al. (2006), I try to capture these incentives to engage in aggressive financial reporting by including INC_EPS, a variable equal to the number of consecutive years the firm has reported earnin”
• Trading incentives to meet the analyst forecast (2006, background): “Furthermore, Bartov et al. (2002) show that firms just meeting the earnings threshold (even with accruals) receive an equity premium that persists for at least three years.”
• Audit Quality and the Trade-Off between Accretive Stock Repurchases and Accrual-Based Earnings Management (2012, background): “Firms that consistently meet or beat analysts’ EPS forecasts enjoy higher credibility (Graham et al. 2005) and valuation premiums (Kasznik and McNichols 2002; Brown and Caylor 2005) that persist even if EPS is knowingly managed (Bartov et al. 2002).”
• Equity Incentives and Earnings Management (2005, positive): “meeting analysts’ forecasts (Bartov et al. 2002; Kasznik and McNichols 2002) and the negative”