Accounting Papers

Document Type

Journal Article

Date of this Version

5-2013

Publication Source

Journal of Accounting Research

Volume

51

Issue

2

Start Page

225

Last Page

266

DOI

10.1111/1475-679X.12007

Abstract

We decompose quantitative management earnings forecasts into macroeconomic and firm-specific components to determine the extent to which voluntary disclosure provided by management has macroeconomic information content. We provide evidence that the forecasts of bellwether firms, which are defined as firms in which macroeconomic news explains the greatest amount of variation in the forecasts, provide timely information to the market about the macroeconomy when bundled with earnings announcements. Further, we show that bellwether firms provide timely information about both industry-specific events and broader economic events. Finally, we document that the macroeconomic news in individual forecasts is more pronounced for bad news and point forecasts.

Copyright/Permission Statement

This is the peer reviewed version of the following article: BONSALL, S. B., BOZANIC, Z. and FISCHER, P. E.. (2013), What Do Management Earnings Forecasts Convey About the Macroeconomy?. Journal of Accounting Research, 51: 225–266., which has been published in final form at http://dx.doi....75-679X.12007. This article may be used for non-commercial purposes in accordance with Wiley Terms and Conditions for Self-Archiving http://olabout.wiley.com/WileyCDA/Section/id-820227.html#terms.

Keywords

voluntary disclosure, management earnings forecasts, bellwether firms, macroeconomic risk

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Date Posted: 27 November 2017

This document has been peer reviewed.