IDEAS home Printed from https://ideas.repec.org/a/usm/journl/aamjaf00702_79-102.html
   My bibliography  Save this article

Key Performance Indicators and Analysts' Earnings Forecast Accuracy: An Application of Content Analysis

Author

Listed:
  • Alireza Dorestani

    () (College of Business and Management, Department of Accounting, Business Law and Finance, Northeastern Illinois University, 5500 North St. Louis Avenue, Chicago, Illinois 60625-4699 USA)

  • Zabihollah Rezaee

    (Fogelman College of Business and Economics, 300 Fogelman College Admin Bldg., The University of Memphis, Memphis, TN 38152-3120, USA)

Abstract

We examine the association between the extent of change in key performance indicator (KPI) disclosures and the accuracy of forecasts made by analysts. KPIs are regarded as improving both the transparency and relevancy of public financial information. The results of using linear regression models show that contrary to our prediction and the hypothesis of this paper, there is no significant association between the change in non- financial KPI disclosures and the accuracy of analysts' forecasts. Nonetheless, when we employ a non-linear regression and deflate the absolute value of forecast errors (the dependent variable in this study) by the stock price, the results support the hypothesis of an association between a change in non-financial KPI reporting and the accuracy of analyst forecasts. These results have policy implications, as worldwide policymakers, regulators, corporations and analysts underscore the importance of KPI disclosures.

Suggested Citation

  • Alireza Dorestani & Zabihollah Rezaee, 2011. "Key Performance Indicators and Analysts' Earnings Forecast Accuracy: An Application of Content Analysis," Asian Academy of Management Journal of Accounting and Finance (AAMJAF), Penerbit Universiti Sains Malaysia, vol. 7(2), pages 79-102.
  • Handle: RePEc:usm:journl:aamjaf00702_79-102
    as

    Download full text from publisher

    File URL: http://web.usm.my/journal/aamjaf/vol7-2-2011/7-2-3.pdf
    Download Restriction: no

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Elzahar, Hany & Hussainey, Khaled & Mazzi, Francesco & Tsalavoutas, Ioannis, 2015. "Economic consequences of key performance indicators' disclosure quality," International Review of Financial Analysis, Elsevier, vol. 39(C), pages 96-112.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:usm:journl:aamjaf00702_79-102. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Journal Division, Penerbit Universiti Sains Malaysia). General contact details of provider: http://edirc.repec.org/data/aammmea.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.