英文摘要 |
Prior research documents the association between earnings forecasts and security prices/returns, between earnings forecasts and earnings management, and between earnings management and security prices/returns. To my knowledge, no study explicitly investigates the relation among the aforementioned three mechanisms. Moreover, relevant Taiwan-based research mainly focuses on mandatory releases of earnings forecasts. Accordingly, I examine whether the association between real and accounting earnings management differs, whether investors react to these earnings management activities differently, and whether investors' sophistication affects their reaction to firms voluntarily issuing earnings forecasts, before versus after the waiver of mandatory disclosures. Given that the reporting incentives to issue mandatory versus voluntary earnings forecasts may augur differently for investors' reaction, I also investigate the impact of the incentives to smooth earnings and reduce forecast errors in the pre- and postvoluntary earnings forecast regimes. |