Evidence of Informational Asymmetries from Management Earnings Forecasts and Stock Returns

摘要: This paper compares the information investors have about a firm's future earnings, as reflected in its stock price, to that of management, management earnings forecast. Stock returns preforecast and forecast announcement period are positively associated with errors, indicating prices contain beyond forecasts. phenomenon can occur if does not issue true or have. The first hypothesis, forecasts do fully reflect management's information, implies will be biased directional nondirectional manner. study conducts tests for bias develops test bias, using sample occurring years 1979-1983. hypothesis is only rejected made 1982. Given magnitude economic changes 1982, post-forecast may well been negative, causing average error 1982 differ from zero. In other studied, rejected. data, thus, suggest because access some managers not. THIS provides evidence concerning two differences managers' investors' corporate earnings. first, which has widely studied prior research, concerns extent have.1 second difference, received considerably less attention accounting literature, management.2 By accessing sources than basis evaluating credibility disclosures. primary I would like express my appreciation Graduate School Business at Stanford University generous support this research. Michael Smith, Alison Kirby, D. Shores, Mark Weiner, Boehm, Andy Eckert provided valuable data collection assistance. Ray Ball, Vic Bernard, Carol Eger, George Foster, Mahendra Gupta, Chuck Horngren, Bob Kaplan, Bill Kinney, Uri Ronnen, Katherine Schipper, Tom Stober, Peter Wilson, Wolfson helpful comments varying stages project. addition, constructive anonymous reviewers very much appreciated. Maureen McNichols Assistant Professor ofAccounting andBusiness Trust Fellow 1988-1989, Business, University. Manuscript December 1987. Revision June 1988. Accepted August