분석가의 적정주가 괴리율과 이익조정

This study investigates whether managers have a incentive to manage reported earnings to manage stock price. Specifically, this study examines whether managers use discretionary accruals to manage earnings to lessen the gap between target price suggested by sell-side analysts and firms’ actual stock price. With a rapid capital market development and stock based compensations, stock price management became significantly important issue for firms’ managers. Analysts play a very important role in capital markets hence previous literatures find an evidence that managers do manage their reported earnings to meet or beat analysts’ earnings forecasts. This study however, predicts managers may have a strong inventive to meet analysts’ target price thus engage in earnings management. The empirical results are summarized as follow. This study finds an evidence that the price difference ratio(PDR: difference between analysts’ target price and actual price) has significant positive relations with abnormal accrual variables, suggesting that managers engage in earnings management to lessen the gap between target price and actual price as a means of managing stock price. In additional analysis, PDR was found to have positive associations with income-increasing accruals, suggesting that income-increasing firms engage in earnings management more aggressively when the PDR gap is larger. Furthermore, the sensitivity analysis was found consistent with the main results. This study has a distinctive feature to contribute to the literature since the paper is the very first to examine managers’ new incentive(stock price management) to manage reported earnings.