There is an article mentioned "When asked why ‘‘sophisticated’’ investors, such as institutions and analysts, would not look beyond short-term earnings misses or a bump in the earnings path, assuming that long-run prospects are relatively unaffected, interviewed CFOs respond in three ways. First, some point out that many players in the market today, especially youthful equity analysts, do not have a sense of history, in that they may not have experienced a full business cycle. Referring to young equity analysts, one agitated CFO remarks, ‘‘I don’t see why we have to place these disclosures in the hands of children that do not understand the information.’’ Such an absence of history makes analysts more prone to overreactions when the firm misses an earnings target or when a new kink appears in the earnings path. Second, fund managers are compensated on the basis of how their funds have done relative to peer managers. If one fund starts selling the firm’s stock when the firm misses an earnings target, fund managers at peer firms have incentives to sell to protect their compensation. Thus, relative performance evaluation of fund managers is believed to promote ‘bandwagon’’ investing and less willingness to hold a stock for the long run. Third, the number of traders who try to profit from day-to-day movements in the stock price has increased in recent times (e.g., hedge funds). If a firm misses an earnings target, this might trigger automatic sell programs, which will drive the price lower. One CFO points out that many investors ‘‘sell first and ask questions later.’’ Finally, when we ask CFOs to explain why earnings misses and the related negative reactions of individual firms ought to matter to a diversified investor, they respond that ‘‘these investors diversify by holding less of our stock and more of someone else’s,’’ indicating again that managers believe that idiosyncratic risk matters".

Based on the arguments discussed, can it be argued that CEOs create accruals in order to have effective earnings management to avoid signaling to analysts?