International Journal of Accounting
Financial information, Investors, Business communications, Financial management, Economics, Strategic management, Information dissemination, Earnings, Income measurement
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.
Sun, Jerry. (2011). The effect of analyst coverage on the informativeness of income smoothing. International Journal of Accounting, 46 (3), 333-349.