Do accounting standards matter to financial analysts? An empirical analysis of the effect of cross-listing from different accounting standards regimes on analyst following and forecast error

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• 作者：Abed AL-Nasser Abdallah^a ; Wissam Abdallah^b ; ^{abdallahw@cardiff.ac.uk} ; Ahmad Ismail^c
• 关键词：Cross-listing ; Information disclosure ; Accounting standards ; Analyst following ; Forecast error
• 刊名：The International Journal of Accounting
• 出版年：2012
• 期刊代码：21_00207063
• 类别：bus
• 出版时间：June, 2012
• 卷：47
• 期：2
• 页码：168-197
• 文件大小：383 K

摘要

This paper explores whether the effects of cross-listing on analyst following and forecast error differ among firms with different accounting standards. The results reveal a higher increase in the number of analysts for cross-listed firms that follow their home country's GAAP prior to cross-listing and reconcile or switch to IAS/US GAAP or UK GAAP after cross-listing, compared to those that adopt IAS or US GAAP prior to cross-listing. We find that firms that switch to IAS/US GAAP have a higher increase in analyst following after cross-listing compared to firms that reconcile to IAS/US GAAP. In addition, we find a higher increase in analyst following after cross-listing for firms from low-level accounting standards environments compared to firms from high-level accounting standards environments. Our results show evidence of an increase in the magnitude of analysts鈥?forecast error after cross-listing for firms that follow their home country's GAAP pre-cross-listing but reconcile post-cross-listing to IAS/US GAAP or UK GAAP. On the other hand, we report a decrease in forecast error for firms that switch to IAS/US GAAP.