Does the financial analysts' usage of non-financial information influence the analysts' forecast accuracy? Some evidence from the Belgian sell-side financial analyst

International Journal of Accounting

Volumn 42, Issue 3, 2007, Pages 237-271

  Orens, Raf ^a,b   Lybaert, Nadine ^a  

^a HASSELT UNIVERSITY   (Belgium)

^b UNIVERSITY OF ANTWERP   (Belgium)

Author keywords

Analyst reports; Annual reports; Disclosure; Financial analysts' forecast accuracy; Non financial information; Non financial information use

Indexed keywords

EID: 34547839166     PISSN: 00207063     EISSN: None     Source Type: Journal    
DOI: 10.1016/j.intacc.2007.06.002     Document Type: Article

References (79)

1. Abdolmohammadi M.J. Intellectual capital disclosure and market capitalization. Journal of Intellectual Capital 6 3 (2005) 397-416
2. Ackert L.F., Church B.K., and Shehata M. What affects individuals' decisions to acquire forecasted information?. Contemporary Accounting Research 13 2 (1996) 379-399
3. American Institute for Certified Public Accountants (AICPA). Improving business reporting: a customer focus: Meeting the information needs of investors and creditors. Report of the special committee on financial reporting (1994), AICPA, New York
4. Amir E., and Lev B. Value-relevance of nonfinancial information: The wireless communications industry. Journal of Accounting and Economics 22 1 (1996) 3-30
5. Barker R.G. The market for information: Evidence from finance directors, analysts and fund managers. Accounting and Business Research 29 1 (1998) 3-20
6. Beattie V., McInnes B., and Fearnley S. Narrative reporting by listed UK companies: A comparative within-sector topic analysis. Research paper University of Stirling (2002)
7. Beretta S., and Bozzolan S. A framework for the analysis of firm risk communication. The International Journal of Accounting 39 3 (2004) 265-288
8. Blij I.H.C. Het gebruik van jaarrekeningen door analisten. Maandblad voor Accountancy en Bedrijfseconomie 75 10 (2001) 421-430
9. Botosan C.A. Disclosure level and the cost of equity capital. Accounting Review 72 3 (1997) 323-350
10. Botosan C.A., and Plumlee M.A. A re-examination of disclosure level and the expected cost of equity capital. Journal of Accounting Research 40 1 (2002) 21-40
11. Bowen R.M., DuCharme L., and Shores D. Stakeholders' implicit claims and accounting method choice. Journal of Accounting and Economics 20 3 (1995) 255-295
12. Bozzolan S., Favotto F., and Ricerri F. Italian annual intellectual capital disclosure. Journal of Intellectual Capital 4 4 (2003) 543-558
13. Brennan N. Reporting intellectual capital in annual reports: Evidence from Ireland. Accounting, Auditing and Accountability Journal 14 4 (2001) 423-436
14. Breton G., and Taffler R.J. Accounting information and analyst stock recommendation decisions: A content analysis approach. Accounting and Business Research 31 2 (2001) 91-102
15. Brown L.D. How important is past analyst forecast accuracy. Financial Analysts Journal 57 6 (2001) 44-49
16. Brown S., Hillegeist S.A., and Lo K. Conference calls and information asymmetry. Journal of Accounting and Economics 37 3 (2004) 343-366
17. Capstaff J., Rees W., and Paudyal K. Analysts' forecasts of German firms' earnings: A comparative analysis. Journal of International Financial Management & Accounting 9 2 (1998) 83-116
18. Clement M.B. Analyst forecast accuracy: Do ability, resources, and portfolio complexity matter. Journal of Accounting and Economics 27 3 (1999) 285-303
19. Clement M.B., and Tse S.V. Do investors respond to analysts' forecast revisions as if forecast accuracy is all that matters. Accounting Review 78 1 (2003) 227-249
20. Cooke T.E. Disclosure in the corporate annual reports of Swedish companies. Accounting and Business Research 19 74 (1989) 113-124
21. Covrig V., and Low B.S. The relevance of analysts' earnings forecasts in Japan. Journal of Business Finance and Accounting 32 7-8 (2005) 1437-1463
22. Dempsey S.J., and Gatti J.F. The use of strategic performance variables as leading indicators in financial analysts' forecasts. Journal of Financial Statement Analysis 2 4 (1997) 61-79
23. Duru A., and Reeb D.M. International diversification and analysts' forecast accuracy and bias. Accounting Review 44 2 (2002) 415-433
24. Engelen P.-J. Informatieverstrekking door beursgenoteerde vennootschappen: efficiënte financiële markten en beursregulering in België (1999), Intersentia Rechtswetenschappen, Antwerpen
25. Financial Accounting Standards Board (FASB). "Improving business reporting: insights into enhancing voluntary disclosures" Steering Committee Report, Business Reporting Research Project (2001)
26. Flöstrand P., and Ström N. The valuation relevance of non-financial information. Management Research News 29 9 (2006) 580-597
27. Fort P.C. Analysts' forecast accuracy and the presentation of a mandated accounting change. Journal of Applied Business Research 13 4 (1997) 93-105
28. Francis J.R., Khurana I.K., and Pereira R. Disclosure incentives and effects on cost of capital. Accounting Review 80 4 (2005) 1125-1162
29. García-Meca E. Bridging the gap between disclosure and use of intellectual capital information. Journal of Intellectual Capital 6 3 (2005) 427-440
30. García-Meca E., and Martínez I. The use of intellectual capital information in investment decisions: An empirical study using analyst reports. International Journal of Accounting 42 1 (2007) 57-81
31. Graham C.M., Cannice M.V., and Sayre T.L. The value relevance of financial and non-financial information for internet companies. Thunderbird International Business Review 44 1 (2002) 47-70
32. Gray S.J., Radebaugh L.H., and Robert C.B. International perceptions of cost constraints on voluntary information disclosures: A comparative study of U.K. and U.S. multinationals. Journal of International Business Studies 21 4 (1990) 597-622
33. Grüning, M., & Stöckmann, K. (2004). Corporate disclosure policy of German DAX-30 companies. Paper presented at the 27th EAA-annual congress Prague.
34. Gu Z., and Wu J.S. Earnings skewness and analyst forecast bias. Journal of Accounting and Economics 35 1 (2003) 5-29
35. Guo R.-J., Lev B., and Zhou N. Competitive costs of disclosure by Biotech IPO's. Journal Accounting Research 42 2 (2004) 319-355
36. Guthrie J., and Petty R. Intellectual capital: Australian annual reporting practices. Journal of Intellectual Capital 1 3 (2000) 241-251
37. Hail L. The impact of voluntary corporate disclosures on the ex-ante cost of capital for Swiss firms. European Accounting Review 11 4 (2002) 741-772
38. Healy P.M., Hutton A.P., and Palepu K.G. Stock performance and intermediation changes surrounding sustained increases in disclosure. Contemporary Accounting Research 16 3 (1999) 485-520
39. Healy P.M., and Palepu K.G. The effect of firms' financial disclosure strategies on stock prices. Accounting Horizons 7 1 (1993) 1-11
40. Hirst E.D., Koonce L., and Simko P.J. Investor reactions to financial analysts' research reports. Journal of Accounting Research 33 2 (1995) 335-351
41. Ho L.-C.J., and Tsay J. Analysts' forecasts of Taiwanese firms' earnings: Some empirical evidence. Review of Pacific Basin Financial Markets and Policies 7 4 (2004) 571-597
42. Ho S.S.M., and Wong K.S. A study of corporate disclosure practice and effectiveness in Hong Kong. Journal of International Financial Management and Accounting 12 1 (2001) 75-102
43. Ho S.S.M., and Wong K.S. Investment analysts' usage and perceived usefulness of corporate annual reports. Corporate Ownership & Control 1 3 (2004) 61-71
44. Hofstede G. Culture's consequences: comparing values, behaviors, institutions, and organizations across countries. 2nd ed (2001), Sage, Thousand Oaks
45. Hope O.-K. Disclosure practices, enforcement of accounting standards, and analysts' forecast accuracy: An international study. Journal of Accounting Research 41 2 (2003) 235-272
46. Holland J., and Johanson U. Value-relevant information on corporate intangibles -creation, use and barriers in capital markets - "Between a rock and a hard place". Journal of Intellectual Capital 4 4 (2003) 465-486
47. Ittner C.D., and Larcher D.F. Are nonfinancial measures leading indicators of financial performance. Journal of Accounting Research 36 3 (1999) 1-35
48. Jacob J., Lys T.J., and Neal M.A. Expertise in forecasting performance of security analysts. Journal of Accounting and Economics 28 1 (1999) 27-50
49. Kristensen K., and Westlund A.H. Accountable business performance measurement for sustainable business excellence. Total Quality Management 15 5-6 (2004) 629-643
50. Lang M.H., Lins K.V., and Miller D.P. ADRs, analysts and the accuracy: Does cross listing in the United States improve a firm's information environment and increase market value?. Journal of Accounting Research 41 2 (2003) 317-345
51. Lang M.H., and Lundholm R.J. Voluntary disclosure and equity offerings: Reducing information asymmetry or hyping the stock?. Contemporary Accounting Research 17 4 (2000) 623-662
52. La Porta R., Lopez-de-Silanes F., Schleifer A., and Vishny R.W. Legal determinants of external finance. The Journal of Finance 52 3 (1997) 1131-1150
53. La Porta R., Lopez-de-Silanes F., Schleifer A., and Vishny R.W. Law and finance. Journal of Political Economy 106 6 (1998) 1113-1155
54. La Porta R., Lopez-de-Silanes F., and Schleifer A. What work in securities laws. Journal of Finance 61 1 (2006) 1-32
55. Leuz C., and Verrecchia R.E. The economic consequences of increased disclosure. Journal of Accounting Research 38 3 (2000) 91-124
56. Leuz C., Nanda D., and Wysocki P.D. Earnings management and investor protection: An international comparison. Journal of Financial Economics 69 3 (2003) 505-527
57. Lev B., and Zarowin P. The boundaries of financial reporting and how to extend them. Journal of Accounting Research 37 2 (1999) 353-385
58. Liang C.-J., and Yao M.-L. The value relevance of financial and nonfinancial information - Evidence from Taiwan's information electronics industry. Review of Quantitative Finance and Accounting 24 2 (2005) 135-157
59. Marston C., and Polei A. Corporate reporting on the Internet by German companies. International Journal of Accounting Information Systems 5 3 (2004) 285-311
60. Marston C., and Shrives P. The use of disclosure indices in accounting research: A review article. British Accounting Review 23 3 (1991) 195-210
61. McEwen R.A., and Hunton J.E. Is analyst forecast accuracy associated with accounting information use?. Accounting Horizons 13 1 (1999) 1-16
62. Meek G., Roberts C.B., and Gray S.J. Factors influencing voluntary annual report disclosures by US, UK, and continental European multinational corporations. Journal of International Business Studies 26 3 (1995) 555-572
63. Moneva J.M., and Llena F. Environmental disclosures in the annual reports of large companies in Spain. European Accounting Review 9 1 (2000) 7-29
64. Mueller G., Gernon H., and Meek G. Accounting: an international perspective. 3rd edition (1994), Irwin, New York
65. Nielsen, C. (2005). Essays on business reporting: production and consumption of strategic information in the market for information. Ph.D. Dissertation, Copenhagen Business School.
66. Plumlee M. The effect of information complexity on the analysts' use of that information. Accounting Review 78 1 (2003) 275-296
67. Previts G.J., Bricker R.J., Robinson T.R., and Young S.J. A content analysis of sell-side financial analyst company reports. Accounting Horizons 8 2 (1994) 55-70
68. Richardson A.J., and Welker M. Social disclosure, financial disclosure and the cost of equity capital. Accounting, Organizations and Society 26 7 (2001) 597-616
69. Robb S.W.G., Single L.E., and Zarzeski M.T. Non-financial disclosures across Anglo-American countries. Journal of International Accounting, Auditing & Taxation 10 1 (2001) 71-83
70. Rogers R.K., and Grant J. Content analysis of information cited in reports of sell-side financial analysts. Journal of Financial Statement Analysis 3 1 (1997) 14-30
71. Sercu P., and Sips G. Leveren beleggingsadviezen een uitzonderlijk rendementop. Tijdschrift voor Economie en Management 38 4 (1993) 371-383
72. Sengupta P. Corporate disclosure quality and the cost of debt. Accounting Review 73 4 (1998) 459-474
73. Sinha P., Brown L.D., and Das S. A re-examination of financial analysts' differential earnings forecast accuracy. Contemporary Accounting Research 14 1 (1997) 1-42
74. Stickel S.E. Reputation and performance among security analysts. Journal of Finance 47 5 (1992) 1811-1836
75. Vandemaele S.N., Vergauwen P.G.M.C., and Smits A.J. Intellectual capital disclosure in The Netherlands, Sweden and the UK: A longitudinal and comparative study. Journal of Intellectual capital 6 3 (2005) 1469-1930
76. Vanstraelen A., Zarzeski M.T., and Robb S.W. Corporate non-financial disclosure practices and financial analyst behavior across three European countries. Journal of International Financial Management and Accounting 14 3 (2003) 249-278
77. Vergoossen R.G.A. The use and perceived importance of annual reports by investment analysts in the Netherlands. European Accounting Review 2 2 (1993) 219-244
78. Welker M. Disclosure policy, information asymmetry and liquidity in equity markets. Contemporary Accounting Research 11 3 (1995) 801-828
79. Womack K.L. Do brokerage analysts' recommendations have investment value. Journal of Finance 51 1 (1996) 137-166