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The impact of the Cadbury Committee Recommendations on analysts' earnings forecasts: UK evidence

Mira, Svetlana 2007. The impact of the Cadbury Committee Recommendations on analysts' earnings forecasts: UK evidence. [Working Paper]. Working Papers in Accounting and Finance, Cardiff: Cardiff University. Available at: http://business.cardiff.ac.uk/sites/default/files/...

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Abstract

This paper examines the relationship between the board structure of UK firms and the accuracy of individual analysts’ earnings forecasts with respect to information asymmetry and agency theory. We hypothesize that managers of firms complying with the recommendations of The Code of Best Practice may have “less to hide” and, subsequently, provide more information to outsiders (including analysts), thus facilitating more accurate analysts’ forecasts. We find that analysts are more optimistic, but less accurate, for firms with a greater proportion of nonexecutive directors. This indicates that non-executive directors are inefficient at addressing the agency disclosure problem (at least in terms of the accuracy of analysts’ earnings forecasts).

Item Type: Monograph (Working Paper)
Date Type: Publication
Status: Published
Schools: Business (Including Economics)
Subjects: H Social Sciences > HG Finance
Uncontrolled Keywords: Financial analysts; Forecast accuracy; Corporate governance; Panel data
Publisher: Cardiff University
ISBN: 1750-6638
Date of First Compliant Deposit: 30 March 2016
Last Modified: 04 Jun 2017 04:30
URI: http://orca.cf.ac.uk/id/eprint/40141

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