2. BACKGROUND AND HYPOTHESIS DEVELOPMENT
In this section, I first discuss the relation between firm-provided disclosures and financial analysts' earnings forecasts. Next, I review some research findings related to the importance of such disclosures to analysts and other users. Then, on the basis of this discussion, I develop the hypotheses.图像图形外文文献及翻译
Accounting policy disclosures and analysts' earnings forecasts
In general, knowing the methods and principles upon which firms base their earnings computations is essential to forecasting future earnings. I do not consider which accounting policy choices firms make, only the level of disclosure about these choices. Gietzmann and Trombetta (2001) discuss effects of firms' specific choices of accounting policies. If investors and analysts are unsure about the accounting policies used in measuring income, they face more uncertainty in forecasting future earnings numbers (and may attach less importance to financial statement information). They can obtain knowledge about accounting policies most easily from firm-specific disclosures. They may also glean this information indirectly by analyzing the time series of earnings and by having firm- and industry-specific expertise, but learning from time series presupposes some stability of a firm's operations and industry structure.
Disclosures of accounting policies may be helpful to financial analysts for several reasons. Even if firms follow consistent methods over time, annual report disclosure of the accounting policies followed may make analysts' forecasting task easier or at least reduce the time they must spend on ascertaining which methods have been followed. More importantly, unless the firm discloses its policies, a user cannot know if the firm is consistently following the same methods over time. Moreover, in order to change accounting methods, home country GAAP must permit alternative methods. Thus, I expect accounting policy disclosures to be most useful when firms can choose among a number of accounting methods to account for a given type of transaction.
The importance of accounting policy disclosures: prior evidence
Previous studies have not examined the relation between accounting policy disclosures and analyst forecast dispersion and error, and no cross-country study has investigated the association between firm-level disclosures and forecast properties. If financial analysts view these disclosures as containing useful information, one would expect such disclosures to be associated with properties of earnings forecasts.本文来自辣.文~论^文·网原文请找腾讯324,9114
Texts on financial statement analysis (e.g., Palepu, Bernard and Healy 1996, 3-7) often advocate beginning the analysis of a firm's accounting quality by identifying the key accounting policies. Chang and Most (1985) survey analysts in New Zealand, United Kingdom and United States and find that they rate the importance of accounting policy disclosures quite highly compared with other annual report disclosures. Other studies (e.g., McEwen and Hunton 1999) find that analysts view other items of the annual report as more important. Vergoossen (1997) investigates whether Dutch investment analysts "fixate" on reported earnings numbers regardless of whether the firm has changed its accounting methods. Focusing on whether analysts mention the accounting changes in their reports, he concludes that some were misled by accounting changes and that the degree of fixation is negatively associated with the level of disclosure. Vergoossen does not, however, directly test whether the analysts used the disclosures other than by mentioning in their investment reports that the changes had been made. A more direct test is whether the properties of analysts' earnings forecasts vary with disclosure of accounting policies.
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