We examine whether information in footnotes might lack reliability because auditors permit more misstatement in disclosed, as opposed to recognized, amounts. In both the stock-compensation and lease settings, audit partners require greater correction of misstatements in recognized amounts than...

<heading id="h1" level="1" implicit="yes" format="display">ABSTRACT</heading>We examine whether analysts' incentives to maintain good relationships with management contribute to the optimistic/pessimistic within-period time trend in analysts' forecasts. In our experiments, 81 experienced sell-side analysts from two brokerage firms predict earnings based on...

<heading id="h1" level="1" implicit="yes" format="display">ABSTRACT</heading>An important problem facing managers is how to enhance the credibility, or believability, of their earnings forecasts. In this paper, we experimentally test whether a characteristic of a management earnings forecast-namely, whether it is disaggregated-can affect its credibility. We also...

<heading id="h1" level="1" implicit="yes" format="display">ABSTRACT</heading>Archival research shows that the market reacts to earnings trend as well as to earnings performance relative to analysts' forecasts (i.e., benchmark performance). We conduct four experiments to investigate "how" and "why" investors react to these two measures when "both" are...