The impact of regulation on firms’ ability to habitually meet or beat analysts’ expectations

Jan L. Williams and Huey-Lian Sun

Research in Accounting Regulation, 2011, vol. 23, issue 2, 188-192

Abstract: Firms are pressured to meet or beat analysts’ expectations (MBE) to avoid being penalized by the market. Some firms sporadically MBE while other firms are able to consistently, or habitually, MBE. This study is an exploratory attempt to investigate how habitual MBE firms are different from firms that sporadically MBE, and whether regulation FD and the Sarbanes–Oxley Act have affected firms’ ability to habitually MBE in the post regulation periods. We find that habitual MBE firms are different than sporadic MBE firms, and that they use strategies less to MBE than sporadic MBE firms. Furthermore, it has become more difficult for firms to habitually MBE in the post-regulation periods.

Keywords: Earnings management; Expectations management; Regulation FD; Sarbanes–Oxley Act; Analysts’ expectations (search for similar items in EconPapers)
Date: 2011
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Persistent link: https://EconPapers.repec.org/RePEc:eee:reacre:v:23:y:2011:i:2:p:188-192

DOI: 10.1016/j.racreg.2011.06.012

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