Research On The Usefulness Of Disclosure Of Earnings Forecast Information Of Chinese Listed Companies

Information plays a core role in security market operation and function. To maintain fair information, and promote information transparency is the key to protecting the investor's interest, and realizing resources-compounding. Therefore, the "information content" about information disclosure has been one of the important issues in the Empirical Study fields of security market.CSRC (China Securities Regulatory Commission) has practiced the earnings forecast since 1998. Until now, it is still in practice and is being improved. Does annual earning preannouncement pass any new information to the market? What is the market's reaction to the earning forecast information? What is the investors' behavior to the earning forecast information? What influence does the new accounting standards impose upon annual earning preannouncement event reaction and so on? These are what author wants to study in this paper.Signal theory and efficient market hypothesis are used to research the usefulness of accounting earnings information, the basic line is through researching the market's reaction to the earnings information disclosed by listed companies to investigate the usefulness of accounting information. In this paper, the author first reviewed the research about the earnings forecast information both in foreign and domestic in security market. Then, the author established theoretical foundation and analyzed the connotation of earnings forecast and its usefulness, Afterwards, proposed the research supposition build on the predecessors' research. At last, the author used the event study method to examine the usefulness of the information based on a sample of earnings forecast information released by listed companies in secondary market of China during 2005-2006. By the research, we find that: 1. The earning forecasts information released by listed companies has expectancy effect, which means that the investors can make rational anticipation with the historical accounting information and other Non-accounting relatively. 2. The earnings forecast information has disclosed effect and the market reacted to the companies with bad news more obviously compared with the companies with good news. 3. The fluctuation of the trading volume shows that the anticipated difference exist among investors, but as the earnings forecast information digested by the security market, the expectation among investors tend to consistent and the differences gradually became smaller and smaller. 4. The new accounting standards have certain negative influence upon the market's reaction to the "good news".It is concluded that forecast information has certain information content and plays a very important role in investors' decision-making. The research supports the CSRC's decision to reinforce the disclosure of the forecast information, still can provide important empirical evidence for the development of complete framework of the forecast information disclosure in China. In the end, I put forward some suggestions on improvement the earnings forecast disclosure of our listed companies, list some limitations and further study of this paper.