Analysts’ Earnings Forecasts and Discretionary Financial Reporting Practices
After my review, I found that this paper is not difficult to write, but there are many points to cover. Teachers please pay special attention to the properties of analyst earnings forecasts in the topic, and the mandatory and discretionary financial reporting practices. The meaning of these nouns must be understood accurately.
The first requirement in the title, I think it should focus on accounting policies and earnings management
The second requirement is about how to discover earning management and how to eliminate the interference caused by different company accounting policies and accounting estimates
The third requirement should be related to the agency problem in corporate governance. On the one hand, it is supervision (audit committee, etc.); on the other hand, it is the setting of remuneration, resulting in earnings management
The content of the fourth requirement, I think there should be some differences in market efficiency and the valuation method chosen by analyst, which will also have a certain impact on investors
The impact of earning management and audit quality on the analyst forecast must be written, because this teacher has also written many related papers, and the audit quality pdf file was written by him.
The above is what I can think of, and other teachers are invited to add more.
the relationship between the properties of analyst earnings forecasts and the mandatory and discretionary financial reporting practices of the firms
Analysts’ Earnings Forecasts and Discretionary Financial Reporting Practices
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ANALYSTS’ EARNING FORECASTS AND DICRETIONARY OR MANDATORY FINANCIAL REPORTING
Introduction
Earnings management is the use of various accounting techniques to produce financial statements that provide an overview of the firm's financial position. Earnings forecasts are based on the expectations of the firm's growth and profitability. Financial analysts form an integral part of the firm and the capital market by building financial models that estimate and provide prospective costs and revenues. Therefore, analysts' forecasts are important because they contribute to the valuation models of investors. Most analysts incorporate the top-down factors such as the macroeconomic factors, currencies, and economic growth rates to influence a firm's corporate growth (Hass et al, 2018, 151). The accuracy and other properties of analysts’ earnings forecasts have impacts on the financial reports. Therefore, high skilled and qualified auditors can manage to improve or reduce the efficiency of earnings forecasts based on the usefulness of the client's decisions. Financial reporting practices are accepted and standard rules that specify how firms must report and maintain their accounts and other transactions that have economic impacts. There are relationships between the properties of analysts' earnings forecasts and the firms' mandatory and discretionary financial reporting practices.
Ordinarily, financial reporting in an organization is critical because auditors may use their experience and skills in helping in forecasting future earnings, and this may help in promoting forecast accuracy. Additionally, the higher quality auditors are successful in constraining the attempts of their clients to manage the earnings that are ideal in meeting the consensus forecasting ongoing prior to the reporting period. It is critical to comprehend that the information available to analysts may affect the complexity and forecast accuracy. This literature will examine and evaluate financial reporting practices that are associated with bias among the analysts, measures that analysts may apply in reducing the implications of the weak financial reporting they offer and will also examine the impacts of corporate governance mechanism in the association between the forecasts offered by the analysts and the company’s financial reporting practices.
1 Properties of Analysts' Forecasts
Analysts gather information on the firm's formal communication channels. However, they are not limited to earnings conference calls, financial disclosures, and financial news items. Analysts are responsible for supplementing these formal channels with investors, the firm's management team, and brokerage clients. Some firms use Analysts' forecasts in stock price forecasts, long-term, and short-term forecasts. Therefore, analysts produce information about firms in various ways (Kothari et al. 2016, p. 195). These are buy and sell recommendations, issuing earnings, and growth forecasts. They also focus on the target prices that manifest collectively as an analyst report. Forces of demand ...
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