Acknowledgements
I appreciate the helpful comments on various versions of this paper by Thomas Fields, Bjørn Jørgensen, Elizabeth Keating, Robert Magee, Wally Smieliauskas, Beverly Walther, Greg Waymire (Associate Editor), an anonymous reviewer and workshop participants at Northwestern, Toronto, the 2000 CIERA/EIIA Conference, the 2001 AAA Midwest Regional and Annual Meetings, and the 2001 EIASM International Workshop on Capital Market Research. All errors are my own. I gratefully acknowledge the financial support of the Norwegian School of Economics and Business Administration and the Rotman School of Management. I thank IBES International Inc. for providing earnings forecast data.本文来自优.文~论^文·网原文请找腾讯3249.114
Abstract
Using an international sample, I investigate whether the extent of firms' disclosure of their accounting policies in the annual report is associated with properties of analysts' earnings forecasts. Controlling for firm- and country-level variables, I find that the level of accounting policy disclosure is significantly negatively related to forecast dispersion and forecast error. In particular, I find that accounting policy disclosures are incrementally useful to analysts over and above all other annual report disclosures. These findings suggest that accounting policy disclosures reduce uncertainty about forecasted earnings. I find univariate but not multivariate support for the hypothesis that accounting policy disclosures are especially helpful to analysts in environments where firms can choose among a larger set of accounting methods.delphi图像处理系统算法设计论文+源码+开题报告+文献综述+答辩PP
Key Words
Accounting policy disclosures, financial analysts, forecast dispersion and error, international
1. INTRODUCTION
Accounting standard setters argue that information about the accounting policies used by a reporting entity is essential for financial statement users in interpreting financial statements (e.g., IAS 1; APB Opinion 22; SSAP 2). In this paper, I investigate whether
the extent of firms' disclosure of their accounting policies matters to financial analysts, an important user group of financial statements. Specifically, using a multi-country sample from the first half of the 1990s, I examine whether the level of accounting policy disclosures in the annual report is negatively associated with two properties of analysts' earnings forecasts: dispersion and error. I also investigate whether accounting policy disclosures are more important to analysts in environments that allow more choice among accounting methods.
Although accounting policy disclosures are a relatively small part of firms' total disclosures, I document that such disclosures, as measured at the firm level by the Center for International Financial Analysis and Research (CIFAR 1995; 1993), are significantly negatively associated with forecast dispersion and error. These results also hold when the level of other annual report disclosures is considered. My findings are consistent with assertions that increased disclosure about accounting policies reduces financial analysts' uncertainty about future earnings or how those earnings are computed, and that such disclosures are helpful to analysts over and above other annual report disclosures.
Additional tests provide limited support for the hypothesis that accounting policy
disclosures are more important in settings allowing greater discretion over accounting methods.2423
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