Signaling Firm Performance Through Financial Statement Presentation: An Analysis Using Special Items




  • Accepted by Jeffrey Callen. We thank the following individuals for their useful comments and discussions: Bill Baber, Ray Ball, Phil Berger, Mark Bradshaw, Jeffrey Callen (the editor), Patricia Fairfield, Michael Kimbrough, S.P. Kothari, Ben Lansford, Roby Lehavy, Asis Martinez-Jerez, Greg Miller, Ray Pfeiffer, Doug Skinner, Mohan Venkatachalam, Jim Wahlen, Greg Waymire, two anonymous reviewers, and seminar participants at Georgetown University, Harvard Business School, University of Massachusetts – Amherst, Michigan State, the UNC/Duke Fall Camp, Stanford University, and the AAA 2006 Annual meeting. We gratefully acknowledge the contribution of I/B/E/S International Inc. for providing earnings-per-share forecast data, available through the International Brokers Estimate System. These data have been provided as part of a broad academic program to encourage earnings-expectation research. We also thank Claire Chiron, Maylene Han, Susanna Kim, and Grace Lin for excellent research assistance. The paper was previously titled “The Strategic Reporting of Special Items: Does Management Presentation Reflect Underlying Firm Performance or Opportunism?”