Dissertation/Thesis Abstract

Financial restatements: Implications for management earnings forecasts
by Zhu, Zinan, Ph.D., The George Washington University, 2010, 83; 3404423
Abstract (Summary)

This study investigates how financial statement restatements influence managers’ subsequent voluntary disclosure behavior and investor response to such disclosures. I find that restating firms are less likely to issue a voluntary earnings forecast following financial restatements. To the extent that firms do issue forecasts, however, the post-restatement forecasts are more timely and more accurate (ex post) than pre-restatement forecasts. Further, investor response to management forecasts is moderated after restatements. Further analyses indicate that investors discount bad-news forecasts, but not good-news forecasts, following financial restatements. This finding suggests an asymmetric loss function associated with the two types of forecasts. In sum, financial restatements alter not only voluntary disclosure behavior but also the market's reaction to such disclosures.

Indexing (document details)
Advisor: Kang, Sok-Hyon
Commitee: Baber, William R., Jones, Christopher L., Kulp, Susan, Tarpley, Robin L.
School: The George Washington University
Department: Accountancy
School Location: United States -- District of Columbia
Source: DAI-A 71/06, Dissertation Abstracts International
Subjects: Accounting
Keywords: Financial restatements, Investor response, Management earnings forecasts
Publication Number: 3404423
ISBN: 978-1-124-01457-9
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