Disclosure strategies for management earnings forecasts: The role of managerial compensation structures, overoptimism, and effort

Hao-Chang Sung and Shirley J. Ho

Journal of Contemporary Accounting and Economics, 2023, vol. 19, issue 1

Abstract: Management earnings forecasts have received significant attention as an important source for setting firm expectations. Our paper argues that how these forecasts are presented to the public is important for managing these expectations. We present both analytical and empirical analyses demonstrating that managers’ disclosure framing choices will depend on the information type, managerial overoptimism, and managerial compensation structures. We also provide evidence showing that disclosure framing choices can dampen stock return volatility. Finally, we indicate that disclosure strategies alter the misreporting results found in Guttman et al. (2006).

Keywords: Management earnings forecasts; Disclosure framing; Compensation structures; Managerial overoptimism (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jocaae:v:19:y:2023:i:1:s1815566923000012

DOI: 10.1016/j.jcae.2023.100351

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