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The Relationship between Management Reputation and the Informativeness of Voluntary Earnings Forecast
Lee, Jan Zan
Chou, Jiunn Der
management reputation;voluntary earnings forecast;information content;public communication
|Issue Date:||2017-11-15 14:53:01 (UTC+8)|
This study investigates the relationship between managers’ reputation and the informativeness of voluntary earnings forecast released by companies listed in the Taiwan Stock Exchange. The accuracy of management forecast, calculated both by the simple average and weighted average for five years prior to the test period, is used as a proxy variable for managers’ reputation. We examine whether changes in stock prices induced by earnings forecast are associated with managers’ reputation. Our results indicate that, for companies with good reputation, there is a significant association between stock price variations and earnings forecst, whether the earnings forecast conveys good news or bad news. However, there appear no significant reaction to the earnings forecast announced by companies with bad reputation. The findings of this study suggest that the market is able to discern the quality of earnings forecasts from the reputation of managers. Therefore, to establish an effective public communication policy, managers should maitain a good record on releasing reliable information to the market.
|Relation:||會計評論, 34, 77-99|
|Appears in Collections:||[會計評論] 期刊論文|
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