The Use of Downside Information to Enhance Investors' Credibility Judgments of Good News Management Forecasts

In the second part of the dissertation, I experimentally test and find evidence that managers can enhance their forecast credibility by supplementing their good news forecasts with downside information. I also document the boundary conditions of the credibility enhancement by the disclosure of downside information. First, I predict and find that the credibility-enhancing effect of the downside supplementary information is moderated by the extent to which investors perceive managers can control the factors described in the downside information. My results also suggest that investors' perceptions of managements' forthcomingness mediate the influences of perceived management controllability on investors' forecast credibility judgments. Second, I predict and find some support that the credibility-enhancing effect is moderated by the proximity of the downside information to the good news forecast. Overall, I add to the literature by showing that managers can use a mechanism---namely, supplementing a good news forecast with downside information---to enhance the credibility of the good news forecast. My findings are important given that managers desire to understand factors that individually and collectively enhance the credibility of their disclosures.

Name thesis:degree_name

Ph.D.

Level thesis:degree_level

Dissertation

Discipline thesis:degree_discipline

Accountancy

Grantor

University of Illinois at Urbana-Champaign

Year dc:date

2015

Author dc:creator

• Harris, Ling L.

Contributors dc:contributor

• Jackson, Kevin E.

• Business Administration, Accounting

Language dc:language

eng

Identifier

(MiAaPQ)AAI3455671

OAI identifier oai:identifier

oai:www.ideals.illinois.edu:2142/87167