Do accounting standards matter to financial analysts? An empirical analysis of the effect of cross-listing from different accounting standards regimes on analyst following and forecast error
Abed AL-Nasser Abdallah,
Wissam Abdallah and
Ahmad Ismail ()
The International Journal of Accounting, 2012, vol. 47, issue 2, 168-197
Abstract:
This paper explores whether the effects of cross-listing on analyst following and forecast error differ among firms with different accounting standards. The results reveal a higher increase in the number of analysts for cross-listed firms that follow their home country's GAAP prior to cross-listing and reconcile or switch to IAS/US GAAP or UK GAAP after cross-listing, compared to those that adopt IAS or US GAAP prior to cross-listing. We find that firms that switch to IAS/US GAAP have a higher increase in analyst following after cross-listing compared to firms that reconcile to IAS/US GAAP. In addition, we find a higher increase in analyst following after cross-listing for firms from low-level accounting standards environments compared to firms from high-level accounting standards environments. Our results show evidence of an increase in the magnitude of analysts’ forecast error after cross-listing for firms that follow their home country's GAAP pre-cross-listing but reconcile post-cross-listing to IAS/US GAAP or UK GAAP. On the other hand, we report a decrease in forecast error for firms that switch to IAS/US GAAP.
Keywords: Cross-listing; Information disclosure; Accounting standards; Analyst following; Forecast error (search for similar items in EconPapers)
JEL-codes: G14 G15 G18 G34 (search for similar items in EconPapers)
Date: 2012
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)
Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0020706312000374
Full text for ScienceDirect subscribers only
Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
HTML/Text
Persistent link: https://EconPapers.repec.org/RePEc:eee:accoun:v:47:y:2012:i:2:p:168-197
DOI: 10.1016/j.intacc.2012.03.002
Access Statistics for this article
The International Journal of Accounting is currently edited by A. R. Abdel-Khalik
More articles in The International Journal of Accounting from Elsevier
Bibliographic data for series maintained by Catherine Liu ().