Ashiq, Ali

Permanent URI for this collectionhttps://hdl.handle.net/10735.1/7908

Professor Ashiq Ali holds the Charles and Nancy Davidson Chair in Accounting. His reasearch interests include:

  • The Role of Financial Accounting Information in the Capital Markets
  • The Relation between Accounting Numbers and Stock Prices
  • Biases in Accounting Numbers Due to Managerial Incentives
  • The Effectiveness of Legal Regimes in Preventing Managers from Misreporting Accounting Data
  • The Process of Dissemination of Accounting Information to the Financial Markets
  • The Efficiency with Which Stock Market Utilizes Accounting and Non-Accounting Information
  • The Factors That Prevent Stock Price from Reflecting the Underlying Value of the Firm
  • Corporate Financial Disclosures

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    Corporate Disclosure, Analyst Forecast Dispersion, and Stock Returns
    (Sage Publications Inc, 2016-11-02) Ali, Ashiq; Liu, Mark; Xu, Danielle; Yao, Tong; Ali, Ashiq
    This article examines whether a corporate disclosure practice is one of the reasons for the forecast dispersion anomaly-the negative relation between analyst forecast dispersion and future stock returns. Prior studies have shown that firms tend to delay the disclosure of bad news and that withholding of news leads to greater dispersion in analysts' forecasts. Accordingly, we predict that firms with higher dispersion in analysts' earnings forecasts are more likely to experience poor earnings in the subsequent quarter, and find evidence consistent with this prediction. After controlling for the relation between forecast dispersion and future earnings, we find that forecast dispersion is no longer significantly negatively related to future stock returns. These results suggest that temporary withholding of bad news by firms increases forecast dispersion among analysts and leads to low subsequent stock returns.

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