Management earnings forecast disclosure: An empirical study of factors influencing the decision.
Item
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Title
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Management earnings forecast disclosure: An empirical study of factors influencing the decision.
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Identifier
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AAI8820867
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identifier
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8820867
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Creator
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George, Nashwa Elgallab.
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Contributor
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Adviser: William Ruland
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Date
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1988
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Language
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English
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Publisher
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City University of New York.
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Subject
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Business Administration, Accounting
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Abstract
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This study examines the factors which influence firms' decisions to report their earnings forecasts. In addition, the study examines the factors that influence the choice of forecast horizons.;The objective is to contribute to an understanding of why some firms release their earnings forecasts, while most firms do not disclose such information. Another objective is to understand why some firms release their forecasts early (first six months of the fiscal year), while other firms release their forecasts late (last six months of the fiscal year).;A sample of forecast firms was compared to a sample of nonforecast firms. A model is then developed to explain the forecast reporting decision and the forecast horizons choice as a function of analysts' forecast errors, changes in earnings, increases in invested capital, ownership structure, good news and whether the firm is followed or not followed by analysts.;The study finds that firms which released earnings forecasts tend to have high analysts' forecast errors, large earnings changes, increase in invested capital in the forecast year and low management ownership. In addition, the study finds that firms tend to release earnings forecasts early if they are followed by analysts, if they have good news and if they have plans to raise new capital.;Finally, the study compares analysts' forecast errors for forecast firms to analysts' forecast errors for nonforecast firms in three years. The results of these comparisons indicate that analysts' forecast errors for forecast firms in the year of management forecasts were larger than analysts' forecast errors in the prior and the following years.;With respect to policy implications, one interpretation is that the status quo may be fairly reasonable from a user point of view. The evidence suggest that firms tend to issue forecasts when these forecasts are most needed.
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Type
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dissertation
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Source
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PQT Legacy CUNY.xlsx
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degree
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Ph.D.
