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JOURNAL OF ACCOUNTING AND FINANCE
Voluntary Clawback Adoption and Analyst Following, Forecast Accuracy, and Bias
Author(s): Henry Kimani Mburu, Alex P. Tang
Citation: Henry Kimani Mburu, Alex P. Tang, (2018) "Voluntary Clawback Adoption and Analyst Following, Forecast Accuracy, and Bias", Journal of Accounting and Finance, Vol. 18, ss. 2, pp. 106-122
Article Type: Research paper
Publisher: North American Business Press
Abstract:
Adoption of voluntary clawback provisions has been on the increase since 2002 with the passage of the Sarbanes-Oxley Act. Many studies document positive outcomes associated with the clawback adoption. We use a one-to-one propensity score matched sample of firms that voluntarily adopt restatement triggered clawback provisions and similar non-adopters. We examine analyst following, analyst forecast accuracy, and analyst forecast optimistic bias. We find that clawback adopters are followed by more analysts. Furthermore, analysts provide more accurate forecasts, and with less optimistic bias. Collectively, our results suggest that the adoption of clawback provisions is associated with meaningful effect among financial analysts.
