Articlebronze2011

CEO Centrality and Meeting or Beating Analysts’ Earnings Forecasts

69 citations0/0 files storedJournal of Business Finance &amp Accounting

No readable copy stored yet — this record is metadata only.

No open-access location is known for this record yet.

Literature note Cite in a project Citation map

Auditing, Earnings Management, Governance Corporate Finance and Governance Corporate Governance and Financial Management

Abstract

Abstract: Using a sample of S&P 500 firms over the period 2000–2005, we examine whether CEO centrality – the relative power of the CEO within the top executive team – is associated with a higher probability of meeting or barely beating financial analysts’ earnings forecasts. We argue that CEOs with relatively high centrality are able to manipulate earnings in order to meet or just beat analysts’ forecasts. Specifically, our results show that there is a positive association between CEO centrality and the likelihood of meeting or just barely beating analysts’ forecasts. This finding holds after controlling for previously identified determinants proxying for managerial incentives, and earnings‐related and forecast‐related attributes. Additional tests show that CEO centrality is related to managing reported earnings upwards so that earnings targets can be met. Interestingly, our results show that as an explanatory variable, CEO centrality outperforms other proxies for CEO power used in prior studies. Collectively, our results suggest that a concentration of power in the top management team with the CEO can result in undesirable financial reporting behavior.

Paper brief

Loading…

Cite this work

Citation unavailable for this work.

BibTeX RIS CSL-JSON

No public copy is stored for this record, so only the metadata is cited.

Citations in this library

Citation map →

Stored only when both papers are in the corpus — 69 citations exist upstream.

References

2005Performance matched discretionary accrual measures 1995Detecting Earnings Management.2005The economic implications of corporate financial reporting 1999Corporate governance, chief executive officer compensation, and firm performance 1997Earnings management to avoid earnings decreases and losses 1999Earnings Management to Exceed Thresholds 1996Corporate Disclosure Policy and Analyst Behavior.2010The Role of Boards of Directors in Corporate Governance: A Conceptual Framework and Survey

Cited by

2020How do powerful CEOs influence corporate environmental performance?2022Carbon performance and firm value of the World's most sustainable companies 2014An exploratory study of earnings management detectability, analyst coverage and the impact of IFRS adoption: Evidence from China 2020Managerial ability and accounting conservatism 2024CEO Power: A Review, Critique, and Future Research Directions 2018CEO network centrality and corporate cash holdings

Explore the map →

Papers that cite the same references — the relational fallback while embeddings are still backfilling.

Imported from OpenAlex (CC0) — nothing here is generated.