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The purpose of this paper is to examine analyst followings of firms starting from one year prior to their filing for Chapter 11 and as the firms progress through bankruptcy proceedings with a focus on firms receiving “Hold” or better recommendations. The authors attempt to answer questions such as what the common characteristics of the firms receiving stronger than expected recommendations one year prior to filing for bankruptcy reorganization or while in bankruptcy are, and how the market reacts to the issuance of stronger ratings for those firms.

The authors design various regressions and apply them to a total of 2,754 sell-side analyst recommendations and 325 firms that are either approaching bankruptcy filing or in the process of reorganizing. In each analysis, the authors control for several firm and performance characteristics.

The authors find that the probability of securing stronger ratings is higher for small firms and for those followed by a greater number of analysts than for large firms and firms followed by fewer analysts. The market becomes more skeptical of optimistic evaluations closer to the date of bankruptcy filing (perhaps reflecting some anticipation) and reacts more positively to rating upgrades issued during bankruptcy protection than to the upgrades issued before the bankruptcy filing.

The conclusions are based on the analysis of analyst recommendations issued shortly before Chapter 11 filings and during bankruptcy proceedings. The conclusions could be strengthened by further analysis of firms’ post-bankruptcy recovery and performance and examination of analyst recommendations issued for the firms after they emerge from Chapter 11..

Analyst security ratings that are more positive than expected are perhaps the result of superior expertise and access to private information. During bankruptcy proceedings, when information disclosure is limited, investors could greatly benefit from reports issued by security analysts.

This study contributes to the literature in a number of ways. First, the authors contribute to the literature on the analyst ratings of firms in distress by considering the period between bankruptcy filing and emergence, while the existing literature provides analysis of pre-bankruptcy recommendations and forecasts. Second, the authors focus on better than expected ratings rather than all types of ratings as the firms approach bankruptcy filings and proceed through reorganization. Finally, they evaluate how investors react to stronger than expected analyst ratings.

This paper aims to determine the equity and debt market reactions of firms to the news of their hiring a credit rating agency (CRA) analyst. Due to recent controversies related to CRAs, the US Securities and Exchange Commission (SEC) requires disclosure of the hiring of an analyst if the analyst recently worked for a rating agency that previously provided a rating for the hiring firm. The authors use those filings to estimate the market value of a credit rating analyst to the hiring firm.

This paper examines the impact of analyst transfers from rating agencies to financial firms in the USA between 2006 and 2014.

The authors find that the hiring of such analysts suggests a value increase for the debt securities of the hiring firm but no such value phenomenon for the equity of the employer firm.

Thus, markets apparently perceive that credit analysts bring valuable inside knowledge about potential clients and about the credit rating formation process to their employer.

This study confirms the need for additional disclosure from CRAs. This study could help the SEC as it discusses ways to require additional disclosure (those discussions are already taking place. New regulations will come out some time in the next couple of years).

This study is the first to examine the impact of such transfers on the prices of marketed securities of firms hiring such analysts.

The effect of situational factors on the rating ability of 28 industrial analysts was determined through the use of rating films. The rating ability was evaluated in terms of rating accuracy and consistency. Significant differences in rating accuracy were found among the analysts from five different companies. The analysts who used time standards for planning functions surprisingly rated more consistently than those who employed time standards for a wage incentive programme. Shop labour organization, union or non‐union, had no significant impact on the analysts′ rating ability. The analysts′ rating consistency was significantly better for the medium (85‐120 per cent) and fast (125‐145 per cent) pace ranges than for the slow (60‐80 per cent) pace range. The rating consistency of the fast pace range was significantly better than the medium pace range. The familiar (machining) operations were rated more accurately and consistently than the unfamiliar (sheet metal) operations. The rating accuracy for the simple operations was significantly better than the moderate and complex operations. The simple and complex operations were rated significantly more consistently than the moderate operations.

The purpose of this paper is to investigate the role and responsibility of credit rating agencies in promoting soundness and integrity, especially in the course of their business activities.

The paper describes, and uses, the framework for the activities of credit rating agencies introduced by the International Organization of Securities Commissions (IOSCO), in order to give effect to this investigation.

Credit rating agencies have implemented the provisions of the Code of Conduct Fundamentals for Credit Rating Agencies of the IOSCO on the quality and integrity of the rating process, to the extent of the resources available to them.

The main source of data is the information collected by the IOSCO from nine credit rating agencies, including the main three, on the quality and integrity of their rating processes. The absence of triangulation of research methods limits the robustness of the findings.

The paper addresses a specific aspect of the credit ratings story since the financial crisis on which there is currently little in the literature. It also focuses upon the actions of credit rating agencies, rather than on how these organisations are, or should be, regulated.

The purpose of this paper is to find out whether the election of star analysts leads to the conflict of interests between analysts\institutional investors and individual investors. And then, further investigate how the election results to influence the individual investors’ decision making.

Given the fact that earnings forecasts and stock ratings are the most important foundations for the investor’s investment decision, the authors investigate the relationship among the earnings forecasts, abnormal returns and the election of star analyst. This paper further analyzes the impact factors on investors’ decision. The data used in this paper for star analysts’ information, analysts’ forecast and recommendations, as well as stock performances-related data are from 2005 to 2012.

This paper finds that mass media cannot select analysts with high forecast accuracy, and then misleads investors. It demonstrates that the analysts with poorer forecast ability and more optimistic stock recommendations are more prone to be entitled as star analysts by mass media, and these titled star analysts tend to show a poorer performance. Therefore, the star analyst worsens investors’ cognition on analysts forecast ability and then misleads investors’ decision making.

Media plays a critical role in corporate governance, information collection and diffusion and reducing the information asymmetry, however, it is good to know the role of media in financial markets from a broader perspective. Because media may also bring negative factors to the financial markets such as misguiding the investors and intensify the conflict of interests between analyst and individual investors.

This paper supports a new perspective of the role of mass media in financial market, which is different from existing studies.

The purpose of this paper is to examine the section of the Jumpstart Our Business Startups (JOBS) Act related to information dissemination by sell-side security analysts. The paper analyzes how the abolishment of the quiet period requirements for emerging growth companies (EGCs) changes the analyst initiation timing and market expectation of and reaction to the issuance of the analyst recommendations.

This paper considers the effect of the abolishment of the quiet period requirements on analyst coverage initiations for EGCs with IPOs between January 2006 and December 2015 using regression analyses and probability models.

The results confirm the current anecdotal and empirical evidence that a shorter, de facto, quiet period exists. Analyst issue stronger average ratings for EGCs than for similar firms with IPOs before the JOBS Act. EGCs with initiations from multiple analysts also experience stronger positive market reaction than the firms with initial offerings before the JOBS Act. The market seems to anticipate which EGCs will have initiations and particularly which EGCs will have initiations from multiple analysts. The investors, however, do not fully anticipate the strength of actual recommendations.

This paper is important for researchers, practitioners and policy-makers to understand how analysts impact the financial markets, how timing of analyst initiations affects stock prices of EGCs and what firm characteristics play a role in securing analyst coverage shortly after initial offerings.

This paper adds to the emerging literature on consequences of and changes brought by the JOBS Act. Specifically, this paper extends the limited literature on analyst initiations issued for firms with IPOs following the JOBS Act, timing of those initiations and magnitude of the market’s response to the initiations.

The purpose of this paper is to examine the accuracy of the US Department of Labor's Occupational Information Network (O*NET), which, replacing the Dictionary of Occupational Titles, analyzes jobs via a hierarchical taxonomy of work in which all task‐level activities are summarized into a 42‐construct taxonomy of first‐order generalized work activities (GWAs).

This study examined the degree of convergence between ratings made using the holistic‐judgment process in the O*NET (which directly rates GWAs using single‐item scales) vs traditional decomposed‐judgment methods which statistically combine ratings of multiple activity items for each GWA.

Analysis of holistic O*NET general work activity ratings with decomposed common‐metric questionnaire (CMQ) ratings revealed poor convergence between holistic vs decomposed methods, low interrater agreement and a tendency for incumbents to rate higher than job analysts.

It is believed that these results raise significant questions regarding the O*NET's plan to rely on unverified holistic ratings obtained from relatively small, volunteer samples of job incumbents to maintain its database over time. There is a clear risk of producing a database of uncertain quality and comparability with the existing analyst ratings. It is concluded that the criteria of quality, accuracy and verifiability should be paramount in efforts to develop a national database of occupational information.

This study is the only empirical analysis of the degree of convergence between ratings made using the holistic‐judgment O*NET and a traditional decomposed‐judgment job analysis. Because job analysis forms the foundation for many human resources functions, effectively setting the standards that drive recruiting efforts, establishing the criteria that are used in hiring, promoting, evaluating, and equitably compensating employees, and forming the basis for many employee training programs, it is absolutely essential that any data source utilized for these purposes should be both accurate and verifiable. This study not only furthers efforts to tests the validity of the O*NET, it also provides empirical evidence of its potential shortcomings.

The purpose of this paper is to investigate whether analysts’ personal cognitive traits mitigate the efficacy of graphical impression management.

Three experiments are conducted wherein 525 professional accountants working as financial analysts rate a hypothetical company’s performance graph depicting its net income trend. The manipulation is the presence (absence) of impression management techniques. Hypotheses test whether different techniques are effective and whether analysts’ cognitive reflection ability mitigates manipulation efficacy.

Presentation enhancement is effective only with impulsive analysts, showing the weakness of this technique through the use of colors. Measurement distortion and selectivity techniques are effective for reflective and impulsive analysts; however, reflective analysts are more critical about graphs prepared via selectivity that emphasize profit recovery following crises.

Each impression management technique is investigated in isolation and in controlled conditions. Further research could consider how personal cognitive traits impact the efficacy of combined techniques and whether imbedding manipulated graphs with other information mitigates impression management efficacy.

Research on impression management is mostly “task-oriented;” few “people-oriented” studies focus on decision making by those using financial reports. Users’ cognitive reflection ability is shown to undermine the efficacy of some impression management techniques.

Financial analysts, auditors and regulators could develop mechanisms to avoid pervasive usage of (or enhance skepticism regarding) techniques not mitigated by users’ reflectiveness.

Evidence from financial analysts with an accounting background provides insights on individual characteristics’ influence on graphical impression management efficacy.

This paper provides insight into the importance of interim reports of UK listed companies to investment analysts. The primary objective of financial reporting is assumed to be the provision of information to help investors make rational investment decisions. In this study, a survey of financial analysts and fund managers was undertaken to determine their perception of the importance of 113 items disclosed in interim reports. The main findings demonstrate that both financial analysts and fund managers perceive disclosure items in the profit and loss account and cash flow statement sections as the most important. Additionally, the results show that there are similarities between financial analysts and fund managers with regard to the relative usefulness of items in the profit and loss account, balance sheet, cash flow statements and accounting policies and notes. However, significant differences exist between the two groups with respect to management commentary information. Overall, the conclusion that can be drawn from these results is that increased disclosure in interim reports is useful to investment analysts. These findings are important for policy‐makers and companies as the views of investment analysts (as users of financial reports) are essential in the attempt to improve disclosure.