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Identifier to cite or link to this item: https://doi.org/10.15057/27537
Identifier to cite or link to this item: https://hdl.handle.net/10086/27537

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Title
THE EFFECT OF CLASSIFICATION SHIFTING ON ANALYST FORECAST ACCURACY: EVIDENCE FROM JAPAN
Creator
Creator Name
CHAE, SOO-JOON CHAE, SOO-JOON
Affiliation
Affiliation Name
Kangwon National University
Creator Name
NAKANO, MAKOTO NAKANO, MAKOTO
中野, 誠 中野, 誠
Affiliation
Affiliation Name
Hitotsubashi University
Key Word
classification shifting
earnings management
analyst forecast
JEL
M41
Abstract
Accounting research has focused extensively on both discretionary accrual-based earnings management (DA) and real earnings management (REM). The third route of earnings management, classification shifting (CS), is a relatively new research area. First, this paper provides evidence that managers in Japan overstate operating income through classification shifting. Second, we find that analysts' forecast accuracy for operating income is reduced for firms that use frequent classification shifting to manipulate operating income upward. This paper can be helpful for regulatory agencies responsible for financial reporting quality when supervising or auditing the quality of firm's financial reporting. This paper also highlights investors' need to perform detailed reviews of firms' financial statements in their decision making.
Publisher
Hitotsubashi University
Issued Date
2015-10
Language
English(eng)
Resource Type
departmental bulletin paper
Version Type
VoR
selfDOI
10.15057/27537
ISSN
0018-2796
NCID
AA00207536
Source Title
Hitotsubashi journal of commerce and management
Volume Number
49
Issue Number
1
Page Start
25
Page End
35
Appears in Collections
Vol. 49, no. 1 (Oct. 2015)
URL
https://hdl.handle.net/10086/27537