Document Type

Article

Publication Date

2011

Publication Title

International Journal of Accounting

Volume

46

Issue

3

First Page

333

Last Page

349

DOI

10.1016/j.intacc.2011.07.005

Keywords

Financial information, Investors, Business communications, Financial management, Economics, Strategic management, Information dissemination, Earnings, Income measurement

Abstract

This study examines whether analyst coverage affects the informativeness of income smoothing. I find that income smoothing enhances earnings informativeness more greatly for firms with high analyst coverage than for firms with low analyst coverage. The results suggest that income smoothing more efficiently communicates private information to investors when firms are followed by more analysts, consistent with the notion that analysts play an important information intermediary role in enhancing the informativeness of income smoothing.

Comments

NOTICE: this is the author’s version of a work that was accepted for publication in International Journal of Accounting. Changes resulting from the publishing process, such as peer review, editing, corrections, structural formatting, and other quality control mechanisms may not be reflected in this document. Changes may have been made to this work since it was submitted for publication. A definitive version was subsequently published in the International Journal of Accounting, 46 (3), 2011 and is available here.

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