The Research Of How Accounting Conservatism Influences The Earning Forecasting From Management

The conservatism was widely used in the accounting field and leaved a profound impact on accounting practice because of the existence of uncertainty factors.However,with the continuous strengthening of the concept of "neutral accounting",the accounting conservatism with "asymmetric" and "non-neutral" characteristics has gradually been criticized.It is not difficult to find out that the current debate in the academic about whether conservatism can reduce information asymmetry is essentially to discuss whether companies can disclose higher quality information under the influence of the conservatism financial policies.Obviously,information is essential to decrease information asymnetry.Therefore,to explore the relationship between accounting conservatism and information asymmetry,firstly,it is necessary to clarify how conservatism affects the company's information disclosure behavior.This paper chooses performance forecast,one of the main channels for investors to get the forward-looking information about the company,to explore how conservatism affects the information asymmetry.Because of the institutional difference,we believed that foreign researches could not be used as suitable references in Chinese special backgrounds.At present,Chinese scholars still focus on the field of formal information disclosure on various issues of listed companies,there are only 3 researches in the field of accounting conservatism and performance forecasting.However,they commonly regarded conservatism as the quality characteristic of accounting information,not accounting policy,so their research model may exist causal inversion errors.At the same time,they total ignored the "asymmetric"characteristic of conservatism may lead different attitudes towards the good news and bad news,Therefore,the existing research may not be sufficient to reveal the economic essence of China's capital market.By continuously tracking the annual performance forecast information disclosure of 1099 A-share listed companies in Shanghai and Shenzhen in 2010-2017,we found that companies under higher level conservatism accounting policies are more willed to disclose forecasting information,and are more likely to disclose detailed,accurate and realistic performance forecasts.However,the timeliness of the news has declined.In terms of good news,the bad forecasting news is timelier and more accurate.In general,accounting conservatism plays an important role in enhancing the motivation of companies to fully disclose,improve the quality of disclosure bad news and reduce information asymmetry.The main contribution of this article is,compared with the previous literature,this paper dialectically analyzes the impact of the "asymmetric" feature of conservatism,and finds that the conservatism company has significant differences in predicting good news and bad news.Compared with good news,it improves the quality of bad news more significantly.In this sense,accounting conservatism mitigates the degree of information asymmetry,especially in curbing the company's intentional concealment of bad news or the publication of untrue news effectively.In conclusion,FASB removed the conservatism from the high-quality guidelines in SFAC No.8 seemed too sloppy,and China Accounting Standards Board should not blindly follow.