Ownership Properties,Voluntary Earnings Forecasts And Budgetary Shirking

The budgetary originated in the 13 th century and was initially used to control state fiscal expenditure.As an extensive management and control tool,budget management plays an important role in allocating resources and improving efficiency today.However,budgetary opportunistic behavior disrupts the budget's function.Due to the concealment of behavior and be harmful to the budget process,budgetary shirking has become the focus of academia.As the listed company's main source of predictive profitability information,earnings forecasts has played an indispensable role in improving the information environment.The changes of Chinese forecasts rules aimed at improving the transparency of information and reduce the information asymmetry.However,with the forecasts frauds occurs,there are scholars and investors began to question the rules reliability.Moreover,there is no “ safe harbor ” and“warning”system can effectively protect the behavior of voluntary earnings forecasts in China,that could make manager don t have motion to forecast.This paper take the A-share listed companies in Shanghai and Shenzhen Stock Markets from 2013 to 2015 was implemented as the study objects,based on the relevant theory and previous research experience to examine the relationship between voluntary earnings forecasts and budget shirking;and explore the changes of the relationships in different ownership properties.The main conclusions of this paper include the following points:(1)There are about 28%Chinese listed firms conducted a budgetary disclosure during the period of 2013~2015,of which about 58% listed company managers have budget shirking behavior.The findings show that although budgetary management have been widely used in form,it hasn t reflected better in annual report.(2)There are about 62% Chinese listed firms disclose earnings forecasts,of which about 41% are mandatory forecasts and about 21% are voluntary forecasts.The findings show that as an important way of information disclosure,earnings forecasts seems to have not received enough attention and good implementation in capital market.(3)There is a significant negative relation between voluntary earnings forecasts and budget shirking;and the impact of voluntary earnings forecasts on budget shirking in private company is significantly stronger than that in state-owned company.This paper examine whether the voluntary earnings forecasts could play a role in improving the transparency of the company's information and curb the manager s budgetary shirking behavior based on the feature of Chinese transition economics and earnings forecasts institutional background.The results will provide empirical evidences that help monitors establish related policies so as to promote a healthy and promising future of Chinese stock market,and enriched the predecessor of budgetary responsibility and theoretical framework.This paper also puts forward some policy suggestions to find out the effective way to reduce the budgetary shirking and improve the operation efficiency of the company.