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Abstracts prior to volume 5(1) have been archived!

Issue 5(1), October 2010 -- Paper Abstracts
Girard  (p. 9-22)
Cooper (p. 23-32)
Kunz-Osborne (p. 33-41)
Coulmas-Law (p.42-46)
Stasio (p. 47-56)
Albert-Valette-Florence (p.57-63)
Zhang-Rauch (p. 64-70)
Alam-Yasin (p. 71-78)
Mattare-Monahan-Shah (p. 79-94)
Nonis-Hudson-Hunt (p. 95-106) 



JOURNAL OF APPLIED BUSINESS AND ECONOMICS


Habitual Earnings Surprises, Earnings (Expectations) Management, and Market Valuation


Author(s): Jason Jiao

Citation: Jason Jiao, (2020) "Habitual Earnings Surprises, Earnings (Expectations) Management, and Market Valuation," Journal of Applied Business and Economics, Vol. 22, Iss.9,  pp. 12-29

Article Type: Research paper

Publisher: North American Business Press

​Abstract:

This study examines characteristics, managerial behavior, and market valuation of U.S. firms that habitually surprise the market. Results show that compared to firms that habitually miss analysts’ forecasts by a small margin, all other habitual groups apply income-increasing discretionary accruals. In addition, firms that habitually beat analysts’ forecasts by big margins also resort to income-increasing real earnings management, and firms that habitually meet/marginally beat analysts’ forecasts apply downward analysts’ forecast management. Valuation tests reveal that none of the other habitual firms fare better than firms that habitually miss analysts’ forecasts by a small margin. In particular, firms that habitually meet/marginally beat analysts’ forecasts by using income-increasing accruals earnings management and downward analysts’ forecast management experience a significant value reduction measured in Tobin’s Q.