 Exploration intensity, analysts’ private information development and their forecast performanceXiaomeng Chen, Sue Wright and Hai Wu Accounting and Business Research, 2018, vol. 48, issue 1, 77-107 Abstract: This study examines whether analysts in the extractive industries in Australia adjust their private information searching and processing in response to the complexity of information about a firm’s exploration and evaluation (E&E) activities. We find that both the proportion of private information in their forecasts and the accuracy of their forecasts increase with the intensity of E&E activities. Additional analyses reveal that this effect is more pronounced for firms with substantial E&E activities but limited production activities, and that analysts’ private information development activities are mainly related to the capitalized E&E expenditures. Our results provide guidance for both investors and future standard setters. They show that investors can benefit from analysts’ expertise in situations of high information asymmetry. They also provide evidence of the advantage of distinguishing successful from unsuccessful investments in resource exploration when accounting for E&E expenditures, which may inform future decisions about accounting for intangible assets. Date: 2018 Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:taf:acctbr:v:48:y:2018:i:1:p:77-107 Ordering information: This journal article can be ordered from DOI: 10.1080/00014788.2016.1204216 Access Statistics for this article Accounting and Business Research is currently edited by Vivien Beattie More articles in Accounting and Business Research from Taylor & Francis Journals |
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