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What motivates a firm to manipulate earnings?

A strong CEO and an increase in institutional shareholding both play a role in the likelihood of earnings manipulation, linked to beating analyst forecasts, says study co-authored at Cambridge Judge Business School. The power of a company's CEO plays a…

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Does anchoring impede investors’ interpretation of earnings news?

by Dr Yuan Li, Research Associate, Cambridge Centre for Finance and Cambridge Endowment for Research in Finance In his best-selling book, Thinking, Fast and Slow, Nobel Memorial Prize in Economics laureate Daniel Kahneman describes anchoring as "one of the most…

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Too good to be true?

There is a clear connection between earnings manipulation and a string of consecutive "beats" of analyst expectations, finds study co-authored at University of Cambridge Judge Business School. If a company "beats" analyst expectations for a series of consecutive reporting periods,…

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