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Corporate managers’ perspectives on forward-looking guidance: Survey evidence

Author

Listed:
  • Call, Andrew C.
  • Hribar, Paul
  • Skinner, Douglas J.
  • Volant, David

Abstract

We survey corporate managers of both guiding and non-guiding firms. We find that managers of firms that provide guidance say that they: (1) primarily provide guidance to satisfy analyst and investor demands and manage analysts’ earnings expectations; (2) are relatively unconcerned about proprietary or litigation costs (managers of non-guiding firms are more likely to see litigation risk as a concern); (3) predominantly issue guidance that is conservative relative to their internal expectations; (4) are concerned that guidance induces analysts and investors to focus on the short-term but not that it induces managers themselves to make myopic decisions internally. We also find that managers are miscalibrated about the accuracy of their guidance and that significant quantities of guidance that managers say their firms issue are not captured by conventional sources. We offer several other new insights relevant to the voluntary disclosure literature.

Suggested Citation

  • Call, Andrew C. & Hribar, Paul & Skinner, Douglas J. & Volant, David, 2024. "Corporate managers’ perspectives on forward-looking guidance: Survey evidence," Journal of Accounting and Economics, Elsevier, vol. 78(2).
  • Handle: RePEc:eee:jaecon:v:78:y:2024:i:2:s0165410124000612
    DOI: 10.1016/j.jacceco.2024.101731
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    Cited by:

    1. Mayew, William J., 2024. "Contemporary insights on corporate guidance: A discussion of Call, Hribar, Skinner, and Volant (2024)," Journal of Accounting and Economics, Elsevier, vol. 78(2).

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    More about this item

    Keywords

    Guidance; Forward-looking information; Voluntary disclosure; Miscalibration; Management forecasts; Myopia;
    All these keywords.

    JEL classification:

    • D80 - Microeconomics - - Information, Knowledge, and Uncertainty - - - General
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • G17 - Financial Economics - - General Financial Markets - - - Financial Forecasting and Simulation
    • M40 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - General
    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting

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