The article studies how managers and analysts handle special items—ostensibly “one‑time” gains and losses—during earnings conference calls, and whether this interaction reveals or obscures earnings management. The authors show that managers mostly spotlight higher‑quality, predicted special items in their scripted remarks, while downplaying opportunistic items that quietly shift recurring expenses below the line. In contrast, analysts disproportionately question those opportunistic items in the Q&A, pressing for details and drawing out longer, more negative‑sounding responses that still do not fully resolve the underlying economics.

Key takeaways:

1. Managers are far more likely to highlight predicted (economically justified) special items in their prepared remarks, while saying less about opportunistic components that embed recurring expenses into “one-time” charges.

2. Analysts tend to zero in on those potentially opportunistic special items in the Q&A, asking more—and longer—questions about them, which elicit lengthier, more negative-toned answers that still may not fully clarify the underlying economics.

3. Analysts who publicly question opportunistic special items are less likely to be called on in the firm’s next earnings call, a pattern the authors interpret as managerial retaliation that can chill aggressive questioning, especially for lower-status analysts.

Read the publication.