Tag Archives: earnings

Do Firms Smooth Earnings Less When They Can Hedge Noise Better? 

By | June 26, 2023

Using accounting discretion to smooth earnings is believed to be pervasive. For example, in an influential survey of CFOs, 96.9% of respondents indicate a preference for reporting smooth earnings. The underlying motives and desirability of this phenomenon, however, remain up for debate.   Under one interpretation, managers smooth earnings to mask poor decision making or rent… Read More »

The Information Role of the Media in Earnings News

By | July 14, 2021

A central question about the media’s role in capital markets is whether media coverage influences investors’ reactions to firms’ disclosures, such as earnings releases. Multiple studies provide evidence consistent with the media disseminating, but not creating, information that influences the market’s earnings response. Specifically, they find that brief articles without, but not lengthier articles with,… Read More »