Empirical Study On The Impact Of New Accounting Standards On Accuracy Of Analysts' Forecast

The Ministry of Finance promulgated the new accounting standards in 2006,which is a set of standards of higher disclosure criteria.It is aimed at transparentizing the capital market and improving investment efficiency by increasing the information content of companies' financial reports.But the report users may not necessarily benefit from it because of the existence of earnings managements or the lack of professional competence among accountants.While security analysts,the professional users in the capital market,will publish earning forecast reports,and then deliver updating financial information to ordinary investors.Therefore,the analyst's earnings forecast accuracy is an important measurement of whether the new accounting standards improved the information quality of capital market.This paper investigates the effect of the new accounting standards implementation and the introduction of fair value measurement on the analysts' earnings forecast accuracy,based on the data of analysts' forecast reports on China's Shanghai and Shenzhen A-share listed companies' financial reports from 2003 to 2015.The empirical results show that after the implementation of new standards,the analyst's earnings forecast errors increased,indicating that it is become difficult for analysts to accurately forecast listed companies' the earnings.And as fair value measurement was introduced,securities analysts can not obtain the useful information from the historically profits of the fair value,and can also not predict it occurred currently,which strengthen the effect of the forecast error increase.At the same time,holding trading financial asset measured by fair value suppresses the effect of the forecast error increase while holding financial assets produced opposite effect,for the gains or losses of former are fully followed by changes in the market price while the later depends on the disposal of the assets by the company.This study expands the researches of IFRS application in the emerging capital market,and introduces the analysts' forecast accuracy index to accounting standards effect research.Simultaneously,it can make reference for the improvement of the accounting standards and the strengthening of the information disclosure supervision.