Classification Shifting and Earnings Predictability
研究发现分类转移不仅可能被经理人用于机会主义报告，还能帮助投资者更好地预测未来业绩，提示现有衡量方法可能不完全反映机会主义行为。
The literature measures classification shifting as the relation between unexpected core earnings and income-decreasing special items. The general view in this literature is that managers shift core expenses to special items to inflate core earnings to achieve self-motivated reporting objectives. However, an additional possibility is that classification shifting helps investors better predict future performance. We find evidence of this positive consequence of classification shifting. Our study raises the possibility that measures of classification shifting in certain settings do not reflect managers’ opportunistic reporting. Given the relatively limited evidence in the literature on the consequences of classification shifting on investors, we believe these findings need to be considered as the literature moves forward.