Accounting Comparability and the Accuracy of Management Earnings Forecasts in Japan PDF Download
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Author: Wenjun Kuang
Publisher:
ISBN:
Category :
Languages : en
Pages : 0
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Author: Wenjun Kuang
Publisher:
ISBN:
Category :
Languages : en
Pages : 0
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Author: Robert M. Conroy
Publisher:
ISBN: 9780943205274
Category : Corporate profits
Languages : en
Pages : 59
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Book Description
Author: Masako N. Darrough
Publisher:
ISBN:
Category : Corporate profits
Languages : en
Pages : 80
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Author: Huong N. Higgins
Publisher:
ISBN:
Category :
Languages : en
Pages : 38
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Book Description
This paper examines analyst forecasts of Japanese firms' earnings during Japan's economic burst period in the 1990s. Using the evidence of analyst earnings forecasts in the U.S. as benchmark, the paper documents the following three findings. First, whereas the forecast accuracy of U.S. analysts following U.S. firms improves over time, the forecast accuracy of U.S. and Japanese analysts following Japanese firms does not. Second, whereas decreases in forecast errors of U.S. analysts following U.S. firms are best explained by decreases in forecast bias of the analysts, increases in forecast errors of U.S. and Japanese analysts following Japanese firms are best explained by increases in the frequency of losses experienced by Japanese firms. Third, Japanese analysts forecast earnings less accurately than do U.S. analysts. These findings reflect the difficulty of producing accurate earnings forecasts during economic downturns. These findings also suggest that Japanese analysts are more bound than their U.S. counterparts by cultural ties that impede forecast accuracy.
Author: Robert M. Conroy
Publisher:
ISBN:
Category : Stock exchanges
Languages : en
Pages : 20
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Author: Akihiro Yamada
Publisher:
ISBN:
Category :
Languages : en
Pages :
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Purpose: Current systems of regulation in Japan require that listed firms disclose earnings forecasts for the coming fiscal year. The Japanese Business Federation is contesting this requirement, requesting that mandatory forecast disclosures be abolished. The purpose of this study is to investigate the relationships (1) between accruals and initial management earnings forecast errors, and (2) between accruals and forecast revisions. Further, the study offers a preliminary discussion of the economic costs of mandatory earnings forecasting, with a specific focus on firms operating under conditions of uncertainty or facing difficulty in analyzing economic information.Design/Methodology/Approach: To investigate the relationship between accruals and management forecast errors (revisions), multiple regression models were designed using data covering the period between 2003 and 2013, pertaining to listed Japanese firms. A model developed by Dechow and Dichev (2002) was applied to estimate normal and abnormal accruals. Findings: I found a positive relationship between accruals and initial management earnings forecast errors, and a negative relationship between accruals and forecast revisions. Further, the relationship between accruals and management forecast errors (revisions) is more pronounced among firms operating in uncertain business environments or facing difficulty in analyzing economic information.Originality/Value: The study provides an important analysis of abnormal working capital accruals in relation to both initial management earnings forecast errors and forecast revisions. While total accruals or working capital accruals have been documented in prior studies in this regard, abnormal accruals have not. Furthermore, this study offers a preliminary discussion of the economic costs associated with earnings forecasting under conditions of mandatory disclosure. The economic impact of forecasting has not previously been addressed under either mandatory or voluntary conditions.
Author: Takato Hiraki
Publisher:
ISBN:
Category :
Languages : en
Pages : 54
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Book Description
We examine the pricing implications of management earnings forecasts by taking advantage of the unique corporate disclosure practice in Japan, where listed firms regularly announce earnings forecasts upon requests by stock exchanges and the press. Calendar-time strategies using the forecasted earnings-to-price ratio earns a premium comparable to, and separate from, the value premium based on the book-to-market ratio. The premium is robust to a variety of factor and characteristic controls including realized and forecasted earnings momentum. The result is more consistent with characteristic pricing than factor pricing and challenges risk-based explanation.
Author: Kenji Yasukata
Publisher:
ISBN:
Category :
Languages : en
Pages : 56
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Book Description
Virtually all firms listed on Japanese stock exchanges report point forecasts of sales and earnings in their annual press releases. The availability of management forecasts in Japan provides a unique research opportunity to investigate managers' prediction of cost behavior of their company. Forecasted costs are available by subtracting forecasted earnings from forecasted sales. Using recent “sticky cost” research methods, the forecasted rate of change in costs can be compared with the actual rate of change in costs. Specifically, I describe the forecasted rate of change in costs as a function of the forecasted rate of change in sales, and comparing the forecasted rate of change in costs with the actual rate of change in costs. The rationale for this approach is, in theory, that costs are resources sacrificed to generate sales; hence, it is generally expected that costs increase (decrease) as sales increase (decrease). Basically, focusing on the relationship between forecasted sales and costs provide deeper insights into management earnings forecasts than focusing on the forecasted earnings because earnings are the aggregated measure of sales and costs. The major findings of this paper are that managers underestimate the rate of increase in costs when sales are expected to increase; however, they tend to overestimate the rate of decrease in costs when sales are expected to decrease, indicating that costs are underestimated regardless of the forecasted direction of change in sales. These findings imply that optimistic bias in management earnings forecasts can partly be attributed to the forecast error of rate of change in costs.
Author: Joshua Ronen
Publisher: Springer Science & Business Media
ISBN: 0387257713
Category : Business & Economics
Languages : en
Pages : 587
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Book Description
This book is a study of earnings management, aimed at scholars and professionals in accounting, finance, economics, and law. The authors address research questions including: Why are earnings so important that firms feel compelled to manipulate them? What set of circumstances will induce earnings management? How will the interaction among management, boards of directors, investors, employees, suppliers, customers and regulators affect earnings management? How to design empirical research addressing earnings management? What are the limitations and strengths of current empirical models?
Author: Malek El Diri
Publisher: Springer
ISBN: 3319626868
Category : Business & Economics
Languages : en
Pages : 120
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Book Description
This book provides researchers and scholars with a comprehensive and up-to-date analysis of earnings management theory and literature. While it raises new questions for future research, the book can be also helpful to other parties who rely on financial reporting in making decisions like regulators, policy makers, shareholders, investors, and gatekeepers e.g., auditors and analysts. The book summarizes the existing literature and provides insight into new areas of research such as the differences between earnings management, fraud, earnings quality, impression management, and expectation management; the trade-off between earnings management activities; the special measures of earnings management; and the classification of earnings management motives based on a comprehensive theoretical framework.
