The Role of Additional Non-EPS Forecasts: Evidence Using Pre-Tax Forecasts

Persistent Link:
http://hdl.handle.net/10150/283609
Title:
The Role of Additional Non-EPS Forecasts: Evidence Using Pre-Tax Forecasts
Author:
Mauler, Landon
Issue Date:
2013
Publisher:
The University of Arizona.
Rights:
Copyright © is held by the author. Digital access to this material is made possible by the University Libraries, University of Arizona. Further transmission, reproduction or presentation (such as public display or performance) of protected items is prohibited except with permission of the author.
Embargo:
Release after 08-Apr-2014
Abstract:
In this study, I examine whether and how analysts' pre-tax earnings forecasts are informative to investors. Specifically, I first examine the determinants of pre-tax forecast coverage and whether pre-tax forecasts are incrementally informative to investors in evaluating firm performance. Next, I examine whether pre-tax forecasts decrease the transparency of tax-related earnings management. Lastly, I examine how pre-tax earnings forecasts influence management's incentives to avoid taxes. Using I/B/E/S data from 2002-2011, I find pre-tax forecast coverage is associated with firm-level tax characteristics. In addition, I find investors utilize pre-tax earnings forecasts in evaluating firm performance, after controlling for after-tax earnings forecasts. In addition, the results of this study indicate investors more significantly discount earnings which have been managed through the tax account when pre-tax earnings forecasts are available, consistent with increased transparency resulting from detailed forecasting. Lastly, I find some evidence that increases in pre-tax forecast coverage are associated with a decrease in tax avoidance. This result is consistent with a change in management's incentives resulting from the existence of additional performance benchmarks. Collectively, this study provides evidence that pre-tax earnings forecasts are informative in multiple settings. These findings have important implications for academics and practitioners in understanding the role of additional non-EPS income statement forecasts.
Type:
text; Electronic Dissertation
Keywords:
Accounting
Degree Name:
Ph.D.
Degree Level:
doctoral
Degree Program:
Graduate College; Accounting
Degree Grantor:
University of Arizona
Advisor:
Dhaliwal, Dan S.

Full metadata record

DC FieldValue Language
dc.language.isoenen_US
dc.titleThe Role of Additional Non-EPS Forecasts: Evidence Using Pre-Tax Forecastsen_US
dc.creatorMauler, Landonen_US
dc.contributor.authorMauler, Landonen_US
dc.date.issued2013-
dc.publisherThe University of Arizona.en_US
dc.rightsCopyright © is held by the author. Digital access to this material is made possible by the University Libraries, University of Arizona. Further transmission, reproduction or presentation (such as public display or performance) of protected items is prohibited except with permission of the author.en_US
dc.description.releaseRelease after 08-Apr-2014en_US
dc.description.abstractIn this study, I examine whether and how analysts' pre-tax earnings forecasts are informative to investors. Specifically, I first examine the determinants of pre-tax forecast coverage and whether pre-tax forecasts are incrementally informative to investors in evaluating firm performance. Next, I examine whether pre-tax forecasts decrease the transparency of tax-related earnings management. Lastly, I examine how pre-tax earnings forecasts influence management's incentives to avoid taxes. Using I/B/E/S data from 2002-2011, I find pre-tax forecast coverage is associated with firm-level tax characteristics. In addition, I find investors utilize pre-tax earnings forecasts in evaluating firm performance, after controlling for after-tax earnings forecasts. In addition, the results of this study indicate investors more significantly discount earnings which have been managed through the tax account when pre-tax earnings forecasts are available, consistent with increased transparency resulting from detailed forecasting. Lastly, I find some evidence that increases in pre-tax forecast coverage are associated with a decrease in tax avoidance. This result is consistent with a change in management's incentives resulting from the existence of additional performance benchmarks. Collectively, this study provides evidence that pre-tax earnings forecasts are informative in multiple settings. These findings have important implications for academics and practitioners in understanding the role of additional non-EPS income statement forecasts.en_US
dc.typetexten_US
dc.typeElectronic Dissertationen_US
dc.subjectAccountingen_US
thesis.degree.namePh.D.en_US
thesis.degree.leveldoctoralen_US
thesis.degree.disciplineGraduate Collegeen_US
thesis.degree.disciplineAccountingen_US
thesis.degree.grantorUniversity of Arizonaen_US
dc.contributor.advisorDhaliwal, Dan S.en_US
dc.contributor.committeememberLitov, Lubomiren_US
dc.contributor.committeememberSunder, Jayanthien_US
dc.contributor.committeememberTrombley, Mark A.en_US
dc.contributor.committeememberDhaliwal, Dan S.en_US
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