Choreographed earnings calls suggest trouble ahead

10/3/2013 | CFO Magazine

Companies that take questions only from "friendly" analysts and otherwise choreograph earnings calls tend to underperform afterward, probably because they are hiding negative information, according to a working paper by professors at Harvard University and the London School of Economics and Political Science. Companies that manipulate calls also tend to have higher accruals and only barely meet earnings forecasts, the paper says.

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