Author: Yijun TuPublisher:
ISBN:
Category :
Languages : en
Pages :
Book Description
Management Earnings Forecasts in IPO Prospectuses
Author: Yijun TuForecasts in IPO Prospectuses
Author: Denis CormierPublisher:
ISBN:
Category :
Languages : en
Pages : 0
Book Description
Prior research suggests that managers may use earnings management to meet voluntary earnings forecasts. We document the extent of earnings management undertaken within Canadian Initial Public Offerings (IPOs) and study the extent to which companies with better corporate governance systems are less likely to use earnings management to achieve their earnings forecasts. In addition, we test other factors that differentiate forecasting from non-forecasting firms, and assess the impact of forecasting and corporate governance on future cash flow prediction. We find that firms with better corporate governance are more likely to include a voluntary earnings forecast in their IPO prospectus. In addition, we find that corporate governance factors have an impact on the use of accruals management to meet forecasts, and on the predictive value of discretionary accruals.
Voluntary Disclosure of Management Earnings Forecasts in IPO Prospectuses
Author: Bruce J. McConomyPublisher:
ISBN:
Category :
Languages : en
Pages :
Book Description
Asymmetric information and mechanisms for its resolution in the initial public offering (IPO) process are subjects of extensive research and debate. In this paper, we investigate the impact of one such mechanism, namely voluntary disclosure of management earnings forecasts by issuers of IPOs, as a means of reducing asymmetric information as well as ex ante uncertainty. Our focus is on the relative importance of this voluntary disclosure mechanism on both IPO underpricing and post-issue return performance. Our results indicate that management earnings forecasts provide important and incremental information compared to other means of reducing asymmetric information, and these disclosures appear to improve the environment of IPO issuance. For example, our underpricing results show that firms that choose to provide forecasts leave quot;less money on the tablequot; with a lower degree of underpricing. In terms of post-issue performance, firms whose forecasts turn out to be optimistic are penalized significantly relative to other forecasters and non-forecasters.
The Accuracy of Management Earnings Forecast in IPO Prospectuses (Malaysia).
Author: Ke ZhangEarnings Management and Forecast Accuracy
Author: Norashikin IsmailPublisher:
ISBN:
Category :
Languages : en
Pages : 0
Book Description
This thesis explores the link between earnings management and forecast accuracy in the context of Malaysian IPO's following a revision of the regulation on earnings forecast disclosure made in 1996. The study involves three different stages. The first stage examines the accuracy of earnings forecasts contained in the IPO prospectuses of Malaysian companies seeking listing from 1996 to December 2002. The second stage of study provides evidence of positive discretionary accrual in financial statements of IPO issuers in the year of IPO, and in the 3 year period following the IPO. Finally, a correlation study examines the link between earnings management and forecast error and other variables representing unexpected change in economic condition and company specific characteristics. The results from the first stage of study indicate that Malaysian IPO companies on average have a negative forecast error, indicating positive bias in their forecast. Multivariate results indicate that regulation of earnings forecast disclosure has no significant impact on accuracy but that economic condition, management optimism, and auditor reputation have. The second stage, studying earnings management on a sample of IPO 1996,1998 and 2000 regulated companies, provides evidence consistent with the prediction that managers of Malaysian IPO companies manage earnings upwards in the year of forecast issuance, or in the year the company make their forecasts. The study also provides evidence that managers continue to manage earnings during the period after listing, so long as there is continuing regulatory scrutiny. The findings of the final stage of study provide evidence of a significant association between earnings management and the relative size and direction of forecast error, after controlling for other expected associations. The regression results reveal that earnings management of Malaysian IPO companies is associated with forecast error, the changes in economic condition represented by a recovery and crisis period, company age and management ownership. The study makes a contribution in terms of understanding the nature of earnings management at the time of an IPO and in particular providing empirical evidence on the link between the forecast error and the extent of earnings management. The result shows that managers appear to manage earnings upwards significantly during the economic crisis and recovery period in order to match or come closer to the forecast made in the prospectus. In a highly concentrated ownership, the actions of IPO managers appear to be contrary to the assumption of agency theory. It is speculated that managers of IPO companies are managing their earnings upwards and reporting towards meeting their forecasts in order to manage their legitimacy and to establish their company's good reputation. This is because, as newly listed companies, they are under close market scrutiny and are under great pressure to meet the projections made to investors.
Determinants of Management Earnings Forecasts
Author: Wolfgang DrobetzPublisher:
ISBN:
Category :
Languages : en
Pages : 48
Book Description
Companies that go public on global stock markets are not obliged to disclose earnings forecasts in their prospectuses. We use this fact to examine the shipping sector, where most firms issue earnings forecasts during the IPO process, and provide unique, international-level evidence. We find overall pessimistic forecasts of ship owners, primarily because of the maritime sector's uncertain and volatile environment. High ship owner participation after going public is associated with less accurate earnings forecasts. The evidence further indicates that financial leverage, a listing in an emerging stock market, and global market conditions are the main factors responsible for inaccurate earnings forecasts.
The Determinants of the Accuracy of Earnings Forecasts in IPO Prospectuses and Their Association with Initial IPO Returns: a Study of Greece
Author: Eirini SpanoudakiAccuracy of Earnings Forecasts Disclosed in IPO Prospectuses
Author: Bingdong XuThe Voluntary Inclusion of Earnings Forecasts in Canadian IPO Prospectuses
Author: Julia Yongya CookPublisher:
ISBN:
Category : Disclosure in accounting
Languages : en
Pages : 60
Book Description
Lockup and Voluntary Earnings Forecast Disclosure in Ipos
Author: Beng Soon ChongPublisher:
ISBN:
Category :
Languages : en
Pages : 37
Book Description
We examine the relation between lockup length and voluntary earnings forecast disclosures for IPOs in Singapore. Unlike firms in the United States, companies in Singapore are allowed to provide earnings forecasts in their IPO prospectuses. We find that forecasters are more likely to accept longer lockup periods, so that the lockup expires after the first post-IPO earnings announcement. Our study also shows that because the lockup agreement removes personal incentives to issue aggressive forecasts, IPO firms tend to issue conservative forecasts. Overall, our results suggest that the lockup mechanism adds credibility to the earnings forecast given in the IPO prospectus.