Abstract
Management earnings forecasts are essential sources of information for organizational shareholders. However, many companies remain in a quandary about how to develop an appropriate governance structure within top management to produce high-quality forecasts. This study investigates how firms with chief information officers (CIOs) impact organizational outcomes in terms of both the frequency and the bias of management earnings forecasts. We integrate the following theories to formulate our hypotheses: upper echelons theory, agency theory, and information processing theory (in conjunction with strategic management literature). Using a sample of firm-years (2000 to 2010), we find robust support for the proposition that firms with CIOs are associated with reduced opportunistic bias in earnings forecasts. In addition, we find that, as information uncertainty increases, firms with CIOs generate management forecasts less frequently and exhibit a reduction in optimistic forecasting bias. Collectively, these findings provide a theory-based understanding of how firms with CIOs can influence forecasting outcomes.
Published Version (
Free)
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callMore From: Journal of the Association for Information Systems
Disclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
