An Empirical Study In Factors Affecting Reliability Of IPO Earnings Forecasts

IPO Earnings forecasts that much stakeholder concerns are important financial information on the securities market. In the field of information disclosure, how to ensure that the earnings forecasts are accurate is a hot issue in both theoretical circles and practical sector. Therefore, studing the factors affecting reliability of the earnings forecasts is very necessary.In 2001, the mandatory disclosure system changes into the voluntary disclosure system. In the present system, this text takes information of 53 IPO earnings forecasts from March 14, 2001 to December 31, 2005 as the object of research. The thoery divided factors affecting the reliability of IPO earnings forecasts into external factors, internal factors and guantizative indicators. Based on previous research results, useing methods such as descriptive statistics, correlation analysis and regression analysis and SPSS software, the theory study the present situation and features and factors affecting reliability of IPO earnings forecasts.The results show that: the percentage of the IPO companies that have disclosed earnings forecasts is rapidly droping. Most IPO earnings forecasts are accurate. Among fifty-there listed companies that make earning forecasts, industrial company takes 87.79%. Whether engage top ten underwriters and whether chairman serves in a general manager concurrently are strongly related to reliability of IPO earnings forecasts. Debt-to-asset ratio is strongly related to accuracy of earning forecasts. And the higher the debt-to-asset ratio, the poorer reliability of earning forecasts.