Research On The Accuracy Of Chinese Listed Companies' Earnings Forecast

With the development of capital markets, China's securities investors become more rationally when making investment decisions, they not only want to know the target company's past financial position, operating results and cash flow, but also the development prospects and future profitability, so the demand of earnings forecast information begin to appear on the capital markets. Thus, the accuracy of earnings estimates has a significant impact on investors. Such information mainly comes from financial analyst and executives of listed companies. Due to information asymmetry, financial analysts' conclusions have little importance on investors because they are external projections. Therefore, this paper mainly researches the accuracy of earnings forecasts made by executives and influencing factors of prediction error.In order to make the research data comparable, selecting A-share listed companies that released performance forecast during year 2007 to 2009 as samples. According to the different nature of dependent variables, respectively using the method of linear regression and Logistic regression to analyses the accuracy and its influencing factors empirically.The results of sample 1 show that, there is a significant negative correlation between audit opinion and prediction error, and the prediction error declines as the increase of the number of independent directors, rises as the increase of the size of the board of supervisors. Ownership concentration and Rev-losing variables don't significantly affect the prediction error, while the Pre-losing and Pre-earning related companies have smaller forecast error. Sample 2, the study discovers that the accuracy of qualitative prediction is higher than quantitative prediction. Ownership concentration affects prediction error in the 1% level of significance, and the higher the degree of ownership concentration, the smaller the earnings forecast error. Listed companies with standard audit opinion have much more errors. The effects of independent directors and the board of supervisors are not obvious, while Rev-losing, Pre-losing and Pre-earning related companies have smaller forecast error.To sum up, the earnings forecast error of Pre-losing and Pre-earning related companies is relatively smaller, the conclusions of audit opinion type, equity concentration and independent directors variables are different in different samples, and the board of supervisors' hypothesis is not verified in two samples, which indicating that the board of supervisors does not supervise managers'performance effectively, these conclusions enriches the relevant research about earnings forecast accuracy and corporate governance...