Investor Sophistication and Patterns in Analysts` Earnings Forecasts

한승수(Han Sam),주상룡(Sang Lyong Joo),김우진(Woo Jin Kim) 한국증권학회 2005 한국증권학회지 Vol.34 No.1

Investor Sophistication and Patterns in Analysts` Earnings Forecasts

한승수(Han Sam),주상룡(Sang Lyong Joo),김우진(Woo Jin Kim) 한국증권학회 2005 Asia-Pacific Journal of Financial Studies Vol.34 No.1

재무분석가의 발생액 구분 능력과 경영자 이익조정과의 관계에 관한 연구

정성환 ( Sung Hwan Jung ),한승수 ( Sam Han ) 한국회계학회 2011 會計學硏究 Vol.36 No.3

본 연구는 재무분석가의 재량적 발생액에 대한 분석 능력이 경영자의 이익조정에 어떠한 영향을 미치는지 분석하고자 한다. 재무분석가가 전기 이익의 질을 분석해 내지 못한 채이에 기초하여 당기 이익을 예측할 경우, 이 예측행위는 비효율적이 될 수밖에 없을 것이다. 경영자의 입장에서 재무분석가의 예측정보는 달성 또는 초과달성해야 할 목표치이므로, 낮은분석 능력으로 말미암아 결과적으로 과대 예측된 재무분석가의 이익예측치는 경영자에게 이익조정의 유인으로 작용할 수 있다. 경영자가 전기 이익을 상향 조정했을 때, 재무분석가가 이를 분석해 내지 못하고 전기에 보고된 이익에 고착화되어 당기 이익을 과대 예측한다면 시장의 기대를 충족시키고자 하는 경영자는 당기에도 이익 조정을 시도할 것이다. 이에 본 연구에서는 재무분석가의 재량적 발생액에 대한 분석 능력의 정도가 경영자의 이익조정 행위와 상관관계가 있을 것이며, 이러한 상관관계는 경영자가 시장의 기대를 충족시키고자 하는 동기가 강할수록 증가하리라 예측하였다. 실증분석 결과는 다음과 같이 요약할 수 있다. 재무분석가가 전기의 재량적 발생액을 구분해내지 못하고 결과적으로 당기 이익을 과대 예측하였을 때 경영자의 이익조정 성향이 증가하는 것으로 나타났다. 이러한 상관관계는 시장의 기대를 충족시키고자 하는 동기가 존재할 때더욱 현저하게 나타났는데 이로써 과대 예측된 재무분석가의 이익예측치가 경영자에게 이익조정 유인으로 작용하고 이 과정에 있어 자본시장의 압력이 매개변수로 작용하고 있음을 확인할 수 있었다. 또한 추종 재무분석가의 수가 증가할수록 경영자의 이익조정 성향이 증가하는 것으로 나타났는데 이는 추종 재무분석가의 수가 자본시장의 관심의 정도를 대변함으로서 나타난 결과로 해석된다. 본 연구는 재무분석가의 비효율적인 예측행위로 인해 높아진 시장의 기대가 경영자의 이익조정 성향을 높일 수 있음을 밝힘으로써 자본시장에서 재무분석가의 예측행위의 중요성을 확인하였다는 데에 의의가 있다. 재무분석가의 예측정보 유용성을 제고하기 위해서는 제도적 차원에서 공시제도의 정비와 경영자의 자발적 공시를 유도할 수 있는 정보환경의 개선이 이루어져야 할 것으로 보인다. This study investigates whether analysts` forecast efficiency affects managers` earnings management behavior. When analysts fail to understand the implications of discretionary accruals from prior period earnings information, forecasted current period earnings would be less efficient. Since managers have an incentive to meet or beat analysts` forecasts, less efficient analysts` forecasts may lead managers to involve in earnings management. If analysts are fixated on prior period earnings and issue optimistic forecasts, managers are more likely to manage current period earnings by exercising more discretion since they know analysts overestimate the persistence of discretionary accruals. We hypothesize that analysts` inability to understand the implications of discretionary accruals is associated with earnings management behavior. Furthermore, this association is more pronounced when managers have stronger incentives to meet or beat market expectations and when investors` demand for earnings information is greater. Using 3,222 firm-year observations on the Korea Stock Exchange for the period from 2002 to 2009, we divide our sample into four groups based on the magnitude of bias from analysts` annual earnings forecasts and examine whether the degree of earnings management varies over the four groups. we find the following empirical evidence. First, consistent with our prediction, the result shows that managers are likely to exercise more accounting discretion when analysts do not fully understand the persistence of accruals and thus they issue optimistic forecasts. Second, this tendency is more significant when managers face higher market pressure to meet or beat analysts` annual earnings forecasts for more than two consecutive years. In addition, we provide corroborating evidence that managers are more likely to manage earnings when the number of analysts following the firm, another proxy for market pressure, is larger. We perform several robustness checks on the data, including separate analyses for loss firms and profit firms, and find that the results are qualitatively not different. We also consider alternative explanations for our findings such as the possible substitution effect of expectation management through management earings forecasts for manipulating earnings through discretionary accruals and find that the result is largely unchanged. This paper contributes to the literature by highlighting the importance of analysts` ability to understand the information contained in discretionary accruals. When analysts do not fully understand the implications of discretionary accruals, their optimistic forecasts might provide managers incentives to satisfy market expectations by exercising more accounting discretion, especially when managers face high capital market pressures. This result implies that the improvement in the informativeness of analysts` forecasted earnings can be achieved through systematic updates of disclosure policies and better information environment that promotes managers` voluntary disclosures. In closing, we mention some potential caveats of the study. First, while suggestive of the link between market pressure and managers` earnings management behavior, our findings are mainly from "ex-post" measures for managers` reporting incentives. If we can measure managers` "ex-ante" incentives to meet or beat analysts` earnings forecasts, we can better understand the relation between analysts` earnings forecasts and subsequent managers` earnings management behaviors. Second, the documented analysts` earnings forecasts behaviors might not necessarily be due to their inability to understand the implications of discretionary accruals. We cannot rule out the possibility that analysts are "intentionally" ignore the lower persistence of discretionary accruals. If analysts` optimistic earnings forecasts are due to the reasons other than their inability, the interpretation of our empirical results could be different. Future research should identify the way to discern those two possibilities and provide a clearer link to managers` earnings management behaviors.

주식매수선택권 행사와 경영자 예측 정보와의 관계

김선미(Seon Mi Kim),최정운(Jeong Un Choi),한승수(Sam Han) 한국관리회계학회 2014 관리회계연구 Vol.14 No.2

본 연구는 2002년에서 2009년까지 표본을 대상으로 경영자의 주식매수선택권 행사와 경영자예측정보 공시의 상관관계와 이러한 예측정보가 경영자의 이익을 극대화하는 방향으로 편의되어 있는지 실증 분석하였다. 선행연구 (Aboody and Kasznik 2000)는 주식매수선택권의 부여시점에 초점을 맞추어 재무분석가들의 예측정보의 비관성 비중을 평가함으로서 주식매수선택권과 관련된 경영자의 기회주의적 행태를 실증하였다. 이는 재무분석가들이 경영자들의 이익을 극대화 하기 위해 주식매수선택권 부여시점에 보다 더 보수적인 이익예측치를 제공한다는 결과를 보인 것으로 해석된다. 하지만, 이러한 결과는 경영자가 미래에 얻을 이익을 높일 수 있는 확률을 높이는 것일 뿐 실제로 기회주의적 이익실현을 실증하지는 못했다는 한계점이 있다. 따라서 본 연구에서는 경영자 본인의 자발적 예측과 이에 따른 주식매수선택권의 행사 여부를 살펴봄으로써 선행연구에서 직접적으로 보여주지 못했던 경영자의 기회주의적 행태를 실증하고자 하였다. 실증분석 결과 경영자 예측정보는 주식매수선택권이 행사되기 전에 주로 공시되며, 이러한 주식매수선택권 행사 전 공시되는 경영자 예측정보는 대체로 낙관적인 경향을 띠고 있음을 발견하였다. 주식매수선택권 부여에 대한 경제적 효과에 대하여는 부정적 측면과 긍정적 측면이 동시에 주장되어 왔다(Jensen and Meckling 1976; Larcker 1983; DeFusco et al. 1990 등). 반면, 본 연구는 주식매수선택권 행사에 초점을 두고 경영자의 예측정보 행태를 분석하였다. 본 연구 결과는 주식매수선택권 행사 전 경영자의 자발적 이익공시를 지나치게 낙관적으로 유도함으로써 경영자와 주주간의 대리인 비용의 감소라는 원래 목적과는 달리 기업의 정보환경에 부정적 영향을 미칠 수도 있다는 시사점을 준다. This paper examines the relation between management’s earnings forecasts and exercise of stock option for listed firms during a sample period from 2002 to 2009. This study assess the bias of management earnings forecasts to maximize the managers’ profit when the management exercise their stock option. Prior literature (Aboody and Kasznik 2000) evaluates the weight of pessimism of analysts earnings forecasts at the time of granting of stock option to prove the management’s opportunistic behavior. That is, financial analysts disclose more conservative earnings forecasts at the time of granting of stock option to maximize managers’ profit. However, these results do not demonstrate an actually managements’ opportunistic behavior to be critical point. Thus, we focus on management earnings forecasting behavior at the time of exercise of stock option to examine the managers’ opportunistic behavior. As the results, managements tend to disclose their earnings forecasts’ information before exercising stock option. Also, we find that managements issue generally optimistic earnings forecasts before that time. Many prior work (Jensen and Meckling 1976; Larcker 1983; DeFusco et al. 1990; etc.) show that positive or negative aspects have been claimed at the same time on economic effect of stock option grants. We focus on management forecasts behavior at the time of exercising stock option. Our results suggest that firms may have negative information environment due to overly optimistic disclosure before exercising stock option, unlike the original purpose of voluntary disclosure may have reduction in agency costs between managers and shareholders.

재무분석가의 장기이익예측 특성 및 결정요인

이동헌(Dong Heun Lee),정성환(Sung Hwan Jung),한승수,Sam Han 한국경영학회 2012 經營學硏究 Vol.41 No.2

This paper examines properties of analysts` long-term earnings forecasts and the determinants of long-term forecast issuance in Korea. Although long-term earnings forecasts are one of the most important inputs in calculating the fundamental value of a firm, prior studies focus primarily on issues related to short-term earnings forecasts such as biases in analysts` short-term forecasts and their incentives to provide such biased forecasts and shed little light on why they issue long-term forecasts and factors that determine long-term forecasts bias. This paper fills that void. We expect that analysts who issue only long-term forecasts are different from those who issue short-term forecasts and there will be some fundamental differences in their characteristics. It is a natural conjecture that long-term forecasts entail more complex tasks that require better firm-specific and domain-specific knowledge and they are more likely to be made by more capable analysts. However, the accuracy of forecasts made by more capable analysts could be lower if their forecasts are opportunistically biased due to their monetary incentives such as sales commissions and other investment banking related business. Assuming that analysts who issue only long-term forecasts are less subject to those incentives, we hypothesize that analysts issuing only long-term forecasts provide more accurate long-term forecasts and less optimistically biased. Concerning the determinants of long-term only forecasts, we hypothesize that they are more concentrated on small-sized growing firms that their stock prices are currently undervalued than their book values but relatively more profitable. Using analysts` earnings forecasts for non-financial firms listed in Korea Stock Exchange (KSE) and KOSDAQ for the period from 2000 till 2007, we find the following results. First, long-term only forecasts are more accurate than long-term forecasts with short-term forecasts. In addition, long-term forecasts are primarily issued for growth stocks with relatively high ROAs but low market-to-book ratio. This result suggests that long-term only forecasts are issued in order to satisfy the information demand by less informed investors with a long-term investment horizon. Second, long-term only forecasts are issued by more capable top analysts, who are relatively less subject to financial incentives since they have higher reputation. Overall, the result is consistent with the fact that information demand is more important in generating long-term earnings information and reputable analysts play an important role in disseminating more accurate long-term earnings information that helps make information environment better. This study has several contributions to the literature. First, this is the first study that investigates the properties and determinants of long-term earnings forecasts. Prior studies investigate only analysts` short-term earnings forecasts and their incentives and not many studies examine characteristics of long-term earnings forecasts, especially those forecasts without short-term forecasts. By improving our understanding of the properties of long-term earnings forecasts, the result of this paper provides a better way to get more accurate fundamental value of a firm and, ultimately, helps make more efficient resource allocations. Second, we find an important, proactive role of investors who demand long-term financial information by showing that investor-initiated information demand, not incentive-driven analysts` supply of long-term earnings information, helps make better information environments. Third, the result of this paper confirms the findings of prior studies on analysts` incentives in a sense that the quality of analysts` provided information is better when there are less financial incentives, especially in the case of long-term forecasts where there are more uncertainties and individual analysts` capability is not well observed.