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Article
Do Corporations Manage Earnings to Meet/Exceed Analyst Forecasts? Evidence from Pension Plan Assumption Changes
Review of Accounting Studies
  • Heng An, University of North Carolina at Greensboro
  • Yul W. Lee, University of Rhode Island
  • Ting Zhang, University of Dayton
Document Type
Article
Publication Date
6-1-2014
Abstract
A significantly larger number of firms increase the expected rate of return on pension plan assets (ERR) to make their reported earnings meet/exceed analyst forecasts than would be expected by chance. In the short run, the stock market reacts positively to these firms’ earnings announcements, suggesting that investors fail to recognize that earnings benchmarks are achieved through ERR manipulation. In the long run, however, firms that employ this earnings management strategy significantly underperform control firms in both stock returns and operating performance.
Inclusive pages
698–735
ISBN/ISSN
1380-6653
Comments

Permission documentation is on file.

Publisher
Springer
Peer Reviewed
Yes
Citation Information
Heng An, Yul W. Lee and Ting Zhang. "Do Corporations Manage Earnings to Meet/Exceed Analyst Forecasts? Evidence from Pension Plan Assumption Changes" Review of Accounting Studies Vol. 19 Iss. 2 (2014)
Available at: http://works.bepress.com/ting-zhang/1/