Research On The Influence Of The Prophase Management Earning Forecast Accuracy Of Listed Companies On The Earning Forecast Error And Earnings Management

Earnings forecast information has special significance for investors, investors can use timely and accurate earnings forecast information to reduce the asymmetry of information and reduce the investment risk. Management earnings forecast information as a form of earnings forecast information has its particularity, on the one hand, the management of listed companies have more internal information, its earnings forecast information for information users should be more useful, on the other hand, the quality of management earnings forecast information, not only affect the information user’s decision-making, will eventually affect the listed company’s reputation and image, so the study of management earnings forecasts will be more meaningful.The usefulness of information is built on the basis of reliability. Only high quality information can really improve the information transparency. However, due to the complexity of management earnings forecast is a continuous process of information transmission and feedback, in this process, management passed the understanding of the status quo and future development prospect of the company to investors by the earnings forecasts, investors accept information can produce their own interpretation of information, investors interpretation of earnings forecast information will feedback to the enterprise management through the different market reaction. Therefore, in the process of such a complex management earnings forecasts the reliability of the information will be influenced by many factors. On the one hand, the reliability of earnings forecast influences by many objective factors such as the corporate governance structure, company size, company performance, the company’s growth. Management earnings forecast is, on the other hand, the management of listed companies to use their understanding of the company, their knowledge and experience on the company’s future development to make a subjective judgment. During the current earnings forecasts, out of caution, maintains its own reputation considerations, the feedback information of different market reaction caused by the early earnings forecasts will taken into account, it may further affect the accuracy of the current management earnings forecast information. And according to the theory of overconfidence, the management of listed companies with the improvement of early earnings forecast accuracy will be bred overconfidence psychology, the current release of the management of the earnings forecast may be too optimistic, so in order to reduce the current management earnings forecast error, maintenance management’s own reputation, maintain the confidence of investors, the management will raise earnings by earnings management.This paper bases on the research of the influence of the management earnings forecast accuracy to the current management earnings forecast error and earnings management, first of all, through the analysis of literature, I think prophase management earnings forecast accuracy will affect the current management earnings forecast error, and then affect the earnings management of listed companies. This paper uses empirical research combined with normative research method, to2008-2010by the Shanghai and Shenzhen a-share market revealed five consecutive management earnings forecast information of listed companies as research samples were studied.This paper through empirical study found that the prophase management earnings forecast accuracy will affect the current management of the earnings forecast error; there is significant negative relationship between them. At the same time, the prophase management earnings forecast accuracy will also affect the earnings management of listed companies, accrued items surplus management and early management profit forecast accuracy is significantly positive correlation. This paper do not found the relationship between real earnings management and the management earnings forecast accuracy.