Mandatory vs. Voluntary Management Earnings Forecasts in China

Huang, Xiaobei; Li, Xi; Tse, Senyo Y.; Tucker, Jenny Wu

doi:10.2139/ssrn.2196425

Cited by 6 publications

(2 citation statements)

References 17 publications

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“…Huang et al (2013) show that when a company's earnings increase or decrease is more than 50%, only about 60% of such companies release forecasts. In other words, even for mandatory disclosure, many companies that should make earnings forecasts still do not do so.…”

Section: Fair Value Accounting and Management Forecastsmentioning

confidence: 99%

The Impact of Fair Value Accounting on Corporate Disclosure

Luo

2016

China Account Financ Rev

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This paper examines the impact of fair value accounting on corporate disclosure after the implementation of the new accounting standards in China. We find that the frequency of management forecasts increases significantly for firms affected by fair value accounting. Further analysis reveals that this relation is more pronounced for forecasts issued after the fiscal period end and for forecasts conveying bad news. Our study provides new evidence about the economic consequences of the new standards. In addition, we explore the determinants of management forecasts from a standard-setting perspective, which contributes to the line of research on corporate disclosure.

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Section: Fair Value Accounting and Management Forecastsmentioning

confidence: 99%

The Impact of Fair Value Accounting on Corporate Disclosure

Luo

2016

China Account Financ Rev

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“…In untabulated tests, we also try the 300-day accumulated abnormal return from the earnings announcement date, but we fail to find any evidence that the ERCs of Big 5 auditors are higher than those of their non-Big 5 counterparts. One possible explanation is the UE information may be pre-empted due to the management earnings forecasts mandated by the listing rules of the Shanghai/Shenzhen exchanges, which require that listed companies should disclose management earnings forecasts when earnings either increase/decrease by 50% or change signs (Huang et al, 2013).…”

Section: Model Specificationmentioning

confidence: 99%

Big N Auditors and Earnings Response Coefficients – A Comparison Study between the US and China*

Zhou

2014

China Account Financ Rev

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industry in the US and China. Building on the seminal work of Teoh and Wong (1993), this essay revisits the tests of the prediction that earnings reports audited by larger audit firms have higher earnings response coefficients (ERCs). Specifically, we investigate whether the positive association between ERCs and perceived audit quality holds in either the US or China using long-term historical data. Empirical analysis based on US data from 1984 to 2012 shows that the ERCs of Big N clients are generally higher than those of non-Big N clients, but such differences have dissipated since 2002, the year the Sarbanes-Oxley Act (SOX) came into effect. However, we find weak evidence in China during 1995 to 2012 that Chinese investors value the credibility of large international auditors. The results also reveal that the relationship between Big N and ERCs is stronger in the US than in China. Overall, our results show that auditor reputation is valued by investors in more developed markets, indicating that both institutional and industry structure affect the relationship between Big N and ERCs.

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Mandatory Financial Reporting Environment and Voluntary Disclosure: Evidence from Mandatory IFRS Adoption

Yang

2012

SSRN Journal

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Mandatory vs. Voluntary Management Earnings Forecasts in China

Cited by 6 publications

References 17 publications

The Impact of Fair Value Accounting on Corporate Disclosure

The Impact of Fair Value Accounting on Corporate Disclosure

Big N Auditors and Earnings Response Coefficients – A Comparison Study between the US and China*

Mandatory Financial Reporting Environment and Voluntary Disclosure: Evidence from Mandatory IFRS Adoption

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