The effect of multi-nationality on the precision of management earnings forecasts
by L. Murphy Smith, Bruce Runyan
International Journal of Accounting, Auditing and Performance Evaluation (IJAAPE), Vol. 4, No. 6, 2007

Abstract: This study examines the relationship between a firm's degree of multi-nationality and its managers' earnings forecasts. Firms with a high degree of multi nationality are subject to greater uncertainty regarding earnings forecasts due to the additional risk resulting from the morecomplex multi-national environment. Prior research demonstrates that firms that fail to meet or beat market expectations experience disproportionate market losses at earnings announcement dates. The complexities and greater uncertainty resulting from higher levels of multi nationality are expected to be negatively associated with management earnings forecast precision. Results indicate that precision of management earnings forecasts is significantly negatively related to multi nationality (foreign sales/total sales and the number of geographic segments). These findings should be of interest to investors, analysts and other stakeholders who make decisions based on management earnings forecasts and to those interested in how multi-nationality affects business in general.

Online publication date: Mon, 10-Mar-2008

The full text of this article is only available to individual subscribers or to users at subscribing institutions.

 
Existing subscribers:
Go to Inderscience Online Journals to access the Full Text of this article.

Pay per view:
If you are not a subscriber and you just want to read the full contents of this article, buy online access here.

Complimentary Subscribers, Editors or Members of the Editorial Board of the International Journal of Accounting, Auditing and Performance Evaluation (IJAAPE):
Login with your Inderscience username and password:

Username:        Password:          Forgotten your password?

Want to subscribe?
A subscription gives you complete access to all articles in the current issue, as well as to all articles in the previous three years (where applicable). See our Orders page to subscribe.

If you still need assistance, please email subs@inderscience.com