The Research On Decision Availability Of Segment Reports In Listed Companies Under The Sight Of Strategy Recognition

Due to the listed company’s strategy to diversify, the external decision-makers have the information needs of the company’s strategy. Because companies rarely disclose details about the strategy, and strategic information directly disclosure by companies is often subjective, Investors doubts about its reliability, therefore, it’s necessary to find a approach for investors are to independently identify the company’s strategy, and whether the strategic information identified by the approach has decision usefulness is also a problem to should be solved. In order to eliminate the drawbacks that consolidated financial information can not reflect the operating situation of each segment of the company, segment reportingemerged.so there is a possibility to identify the company’s strategy segment reporting listed by companies. In this background, we need to seek a kind of method to identify the company’s strategic information by segment information, and verify whether the strategic information identified through this way has decision usefulness for the investment decision.Based on the analysis of the relevant literature review and relevant theory, this paper believes that the segment information disclosure system in China has been relatively mature. The content, classification and information quality of Segment reporting give conditions to recognize strategy information. Thus, this paper explore the method to identify the company strategy by the strategic business unit through industry and product segment report. According to this method, the decision maker can identify the specialization strategy, diversification strategy, integration strategy. Then this paper analyzes the effect of the strategic information recognized by segment reporting. This paper considers external decision makers strategic information into the decision-making, so that the prediction of the future profits of the company accurately, and make more efficient decisions. So this paper test the usefulness of strategy information recognized by segment reporting mainly focus on whether it can enhance the accuracy of the forecast of future income. Based on the analysis of the influence mechanism of different strategic on earnings forecast, this paper design earnings forecast model diversified information, based on different information., and tested by 2009 to 2013 in Shanghai A shares of listing Corporation data. The test results confirmed that, after introducing strategic information to the segment report forecast model by adjusted for risk, the prediction accuracy is higher than the direct use of complicated information and partial information. Therefore, this paper argues that the segment report listing corporation have usefulness to recognize strategy information.There are important theoretical and practical significance of this study. In theory, this study will provide a new research perspective for the usefulness of segment report, enriching the theory related to the usefulness of the segment reporting. In practice, it can provide a new method for external decision makers to identify the company strategy, and enrich the information related to investment analysis.