Abstract
Relative performance evaluation (RPE) compensates managers on their relative performance against a peer group. Since observing more peers’ performance allows managers to better estimate the performance level required to achieve RPE targets, we conjecture that releasing earnings later than peers facilitates managers to achieve targets by exploiting last-minute reporting discretion. Empirical evidence is consistent with our conjecture. Further, managers tend to select peers that release earnings more timely and delay own firms’ earnings releases to be later than peers’ after RPE adoption. Our evidence suggests strategic timing of earnings release and discretionary reporting in response to relative performance evaluation.
| Original language | English (US) |
|---|---|
| Pages (from-to) | 358-386 |
| Number of pages | 29 |
| Journal | Journal of Accounting and Economics |
| Volume | 67 |
| Issue number | 2-3 |
| DOIs | |
| State | Published - Apr 1 2019 |
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All Science Journal Classification (ASJC) codes
- Accounting
- Finance
- Economics and Econometrics
Cite this
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Relative performance evaluation and the timing of earnings release. / Gong, Guojin; Li, Laura Yue; Yin, Huifang.
In: Journal of Accounting and Economics, Vol. 67, No. 2-3, 01.04.2019, p. 358-386.Research output: Contribution to journal › Article
TY - JOUR
T1 - Relative performance evaluation and the timing of earnings release
AU - Gong, Guojin
AU - Li, Laura Yue
AU - Yin, Huifang
PY - 2019/4/1
Y1 - 2019/4/1
N2 - Relative performance evaluation (RPE) compensates managers on their relative performance against a peer group. Since observing more peers’ performance allows managers to better estimate the performance level required to achieve RPE targets, we conjecture that releasing earnings later than peers facilitates managers to achieve targets by exploiting last-minute reporting discretion. Empirical evidence is consistent with our conjecture. Further, managers tend to select peers that release earnings more timely and delay own firms’ earnings releases to be later than peers’ after RPE adoption. Our evidence suggests strategic timing of earnings release and discretionary reporting in response to relative performance evaluation.
AB - Relative performance evaluation (RPE) compensates managers on their relative performance against a peer group. Since observing more peers’ performance allows managers to better estimate the performance level required to achieve RPE targets, we conjecture that releasing earnings later than peers facilitates managers to achieve targets by exploiting last-minute reporting discretion. Empirical evidence is consistent with our conjecture. Further, managers tend to select peers that release earnings more timely and delay own firms’ earnings releases to be later than peers’ after RPE adoption. Our evidence suggests strategic timing of earnings release and discretionary reporting in response to relative performance evaluation.
UR - http://www.scopus.com/inward/record.url?scp=85062902015&partnerID=8YFLogxK
UR - http://www.scopus.com/inward/citedby.url?scp=85062902015&partnerID=8YFLogxK
U2 - 10.1016/j.jacceco.2019.03.002
DO - 10.1016/j.jacceco.2019.03.002
M3 - Article
AN - SCOPUS:85062902015
VL - 67
SP - 358
EP - 386
JO - Journal of Accounting and Economics
JF - Journal of Accounting and Economics
SN - 0165-4101
IS - 2-3
ER -