Tag Archives: accounting review

Carrots, Not Sticks, Motivate Workers

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EAST LANSING, Mich. — What motivates people to work harder: The promise of reward or the threat of penalty?

A new study co-authored by a Michigan State University business scholar says it’s the carrot – and not the stick – that drives productivity.

The study, which appears in The Accounting Review, challenges previous research that says the threat of penalty is more effective for getting increased effort, said Karen Sedatole, associate professor of accounting in MSU’s Broad College of Business. (more…)

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Readability of Annual Reports Affects Accuracy of Analyst Forecasts

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ANN ARBOR, Mich.—Stock analysts’ earnings forecasts for companies with hard-to-read annual financial reports are more informative, but less accurate, say University of Michigan researchers.

A new journal article in the May issue of Accounting Review shows that sell-side financial analysts expend greater effort to generate earnings forecasts of publicly traded firms with less readable 10-K filings. This increased effort by analysts results in earnings reports to investors that contain more information—but less accuracy and greater uncertainty. (more…)

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