Can earnings management be a tool to affect the accuracy of earnings forecasts? Evidence from Taiwan

摘要

This study sets out to investigate the determinants of the accuracy of focusing primarily on earnings management whilst also effectively controlling the two major bias problems – sample-selection bias and self-selection bias – through the econometric model developed specifically for this study. Our results indicate that managers tend to engage in earnings management as a means of improving the apparent accuracy of their forecasting, especially for optimistic forecasters. Furthermore, our analysis, which uses listed firms in Taiwan as the study sample, provides us with a valuable opportunity to observe management disclosure quality from a perspective which differs significantly from that of the prior studies, within which the focus is invariably placed on the more developed markets.