253.E渝达房地产开发公司税务筹划研究 外文原文.doc

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1、Accounting Policy Disclosures andAnalysts ForecastsOle-Kristian HopeJoseph L. Rotman School of ManagementUniversity of Toronto105 St. George Street Toronto, Ontario, Canada M5S 3E6 okhoperotman.utoronto.caAugust 2, 2002AcknowledgementsI appreciate the helpful comments on various versions of this pap

2、er by Thomas Fields, Bjrn Jrgensen, Elizabeth Keating, Robert Magee, Wally Smieliauskas, Beverly Walther, Greg Waymire (Associate Editor), an anonymous reviewer and workshop participants at Northwestern, Toronto, the 2000 CIERA/EIIA Conference, the 2001 AAA Midwest Regional and Annual Meetings, and

3、the 2001 EIASM International Workshop on Capital Market Research. All errors are my own. I gratefully acknowledge the financial support of the Norwegian School of Economics and Business Administration and the Rotman School of Management. I thank IBES International Inc. for providing earnings forecas

4、t data.AbstractUsing an international sample, I investigate whether the extent of firms disclosure of their accounting policies in the annual report is associated with properties of analysts earnings forecasts. Controlling for firm- and country-level variables, I find that the level of accounting po

5、licy disclosure is significantly negatively related to forecast dispersion and forecast error. In particular, I find that accounting policy disclosures are incrementally useful to analysts over and above all other annual report disclosures. These findings suggest that accounting policy disclosures r

6、educe uncertainty about forecasted earnings. I find univariate but not multivariate support for the hypothesis that accounting policy disclosures are especially helpful to analysts in environments where firms can choose among a larger set of accounting methods.Key WordsAccounting policy disclosures,

7、 financial analysts, forecast dispersion and error, international 1. INTRODUCTIONAccounting standard setters argue that information about the accounting policies used by a reporting entity is essential for financial statement users in interpreting financial statements (e.g., IAS 1; APB Opinion 22; S

8、SAP 2). In this paper, I investigate whetherthe extent of firms disclosure of their accounting policies matters to financial analysts, an important user group of financial statements. Specifically, using a multi-country sample from the first half of the 1990s, I examine whether the level of accounti

9、ng policy disclosures in the annual report is negatively associated with two properties of analysts earnings forecasts: dispersion and error. I also investigate whether accounting policy disclosures are more important to analysts in environments that allow more choice among accounting methods.Althou

10、gh accounting policy disclosures are a relatively small part of firms total disclosures, I document that such disclosures, as measured at the firm level by the Center for International Financial Analysis and Research (CIFAR 1995; 1993), are significantly negatively associated with forecast dispersio

11、n and error. These results also hold when the level of other annual report disclosures is considered. My findings are consistent with assertions that increased disclosure about accounting policies reduces financial analysts uncertainty about future earnings or how those earnings are computed, and th

12、at such disclosures are helpful to analysts over and above other annual report disclosures.Additional tests provide limited support for the hypothesis that accounting policydisclosures are more important in settings allowing greater discretion over accounting methods.This paper adds to the literatur

13、e examining the link between disclosure and analyst forecasts. Existing research has studied the determinants and consequences of firms overall disclosure choices. For example, Lang and Lundholm (1996) document that analysts ratings of overall firm disclosure are negatively related to analyst foreca

14、st error and dispersion for a sample of U.S. firms. However, no prior studies have empirically investigated the impact of accounting policy disclosures - a surprising lack given that standard setters view such disclosures as essential. Furthermore, there are few studies on the effects of disclosures

15、 in an international setting (Saudagaran and Meek 1997). The amount of research on the properties of analysts forecasts in an international setting is also limited (Chang, Khanna and Palepu 2000). In particular, no prior multi-country study has examined the association between firm-level disclosures

16、 and forecast properties.The rest of this paper is organized as follows. In the next section I discuss accounting policy disclosures in more detail and develop the hypotheses. Sections 3 and 4 present the data and empirical analyses, respectively. Finally, Section 5 concludes the paper.2. BACKGROUND

17、 AND HYPOTHESIS DEVELOPMENTIn this section, I first discuss the relation between firm-provided disclosures and financial analysts earnings forecasts. Next, I review some research findings related to the importance of such disclosures to analysts and other users. Then, on the basis of this discussion

18、, I develop the hypotheses.Accounting policy disclosures and analysts earnings forecastsIn general, knowing the methods and principles upon which firms base their earnings computations is essential to forecasting future earnings. I do not consider which accounting policy choices firms make, only the

19、 level of disclosure about these choices. Gietzmann and Trombetta (2001) discuss effects of firms specific choices of accounting policies. If investors and analysts are unsure about the accounting policies used in measuring income, they face more uncertainty in forecasting future earnings numbers (a

20、nd may attach less importance to financial statement information). They can obtain knowledge about accounting policies most easily from firm-specific disclosures. They may also glean this information indirectly by analyzing the time series of earnings and by having firm- and industry-specific expert

21、ise, but learning from time series presupposes some stability of a firms operations and industry structure.Disclosures of accounting policies may be helpful to financial analysts for several reasons. Even if firms follow consistent methods over time, annual report disclosure of the accounting polici

22、es followed may make analysts forecasting task easier or at least reduce the time they must spend on ascertaining which methods have been followed. More importantly, unless the firm discloses its policies, a user cannot know if the firm is consistently following the same methods over time. Moreover,

23、 in order to change accounting methods, home country GAAP must permit alternative methods. Thus, I expect accounting policy disclosures to be most useful when firms can choose among a number of accounting methods to account for a given type of transaction.The importance of accounting policy disclosu

24、res: prior evidencePrevious studies have not examined the relation between accounting policy disclosures and analyst forecast dispersion and error, and no cross-country study has investigated the association between firm-level disclosures and forecast properties. If financial analysts view these dis

25、closures as containing useful information, one would expect such disclosures to be associated with properties of earnings forecasts.Texts on financial statement analysis (e.g., Palepu, Bernard and Healy 1996, 3-7) often advocate beginning the analysis of a firms accounting quality by identifying the

26、 key accounting policies. Chang and Most (1985) survey analysts in New Zealand, United Kingdom and United States and find that they rate the importance of accounting policy disclosures quite highly compared with other annual report disclosures. Other studies (e.g., McEwen and Hunton 1999) find that

27、analysts view other items of the annual report as more important. Vergoossen (1997) investigates whether Dutch investment analysts fixate on reported earnings numbers regardless of whether the firm has changed its accounting methods. Focusing on whether analysts mention the accounting changes in the

28、ir reports, he concludes that some were misled by accounting changes and that the degree of fixation is negatively associated with the level of disclosure. Vergoossen does not, however, directly test whether the analysts used the disclosures other than by mentioning in their investment reports that

29、the changes had been made. A more direct test is whether the properties of analysts earnings forecasts vary with disclosure of accounting policies.In summary, although accounting policy disclosures are a relatively small part of firms overall disclosures, analysts may find them useful. Whether they

30、are associated with analysts earnings forecasts is ultimately an empirical question.HypothesesThe above discussion leads to the main hypothesis to be tested:H1: The level of accounting policy disclosures is negatively associated with the dispersion and error in analysts earnings forecasts.Accounting

31、 policy disclosures may serve as a proxy for other information in the annual report. This is a potential problem, especially as the relation between earnings forecasts and policy disclosures, if any, may result from information contained elsewhere in the annual report (i.e., in the basic financial s

32、tatements, other notes or general information). Therefore, I also test whether accounting policy disclosures are incrementally informative beyond other annual report information.Since managers have some discretion over accounting policy disclosures, I also test whether potential endogeneity of repor

33、ting choice affects my results. For this purpose, I include several variables to explain variation in disclosure in a system of equations that captures both the effects and determinants of disclosure variations.I also examine whether the usefulness of these disclosures varies with the degree of flex

34、ibility managers have in choosing among accounting methods. This flexibility depends on home country accounting standards. The financial reporting environment varies considerably across countries (e.g., Ball, Kothari and Robin 2000; Basu, Hwang and Jan 1998). For instance, U.S. GAAP is generally mor

35、e rigid than other countries GAAP with respect to the number of choices allowed among accounting methods (e.g., Basu et al. 1998; Nobes and Parker 1998). I investigate whether the role of accounting policy disclosures in explaining forecast dispersion and error depends on the number of allowable acc

36、ounting methods. In the extreme, if firms have no choice about which accounting methods to employ, annual report disclosure about the chosen policy shouldbe of little value. If, on the other hand, a number of methods are acceptable, users of financial statements will, at a minimum, have to spend les

37、s time and effort on scrutinizing the financials if sufficient disclosures are provided. From this contrast follows the second hypothesis:H2: The level of accounting policy disclosures is more negatively associated with forecast dispersion and error in environments that have a large set of allowable

38、 accounting methods compared with settings that have fewer allowable accounting methods.H2 draws on cross-country heterogeneity of financial reporting practices. OBrien (1998) raises the question of whether analysts abilities to forecast earnings are important outside the United States. Her argument

39、 is that financial statements in some countries have historically been prepared to satisfy legal (including tax) requirements, rather than to inform investors. Although countries have different traditions, different degrees of capital market development, and so on, this does not necessarily imply th

40、at analystsearnings forecasts lack importance in a country such as Germany, where financing comes mostly from sources other than equity investors. Consistent with the perceived need for the information provided by earnings forecasts, Germany has a relatively large number of analysts following each f

41、irm.Furthermore, Capstaff, Paudyal and Rees (2000) show that forecast revisions of German analysts are associated with subsequent abnormal stock returns; the same is true of French and U.K. forecast revisions.5 Hence, there are reasons to believe that these forecasts are important for investors in s

42、ettings outside the United States.3. DATA AND CONTROL VARIABLESIn this section, I describe the disclosure measures, analyst forecast data, the measure of extent of flexibility in choosing among accounting methods, and control variables. Then I discuss sample selection and descriptive statistics. Tab

43、le 1 summarizes variable definitions and data sources.Disclosure dataThe starting point for this study is the Center for International Financial Analysis and Research evaluations of annual report disclosure levels among leading non-financial companies worldwide (CIFAR 1995; 1993). CIFAR measures, on

44、 a scale from 0 to 100, firms disclosure levels based on the inclusion or exclusion of 85 annual report items for the total disclosure index and 20 items for the accounting policy disclosure score. Firms are not penalized for not disclosing non-applicable items.The Appendix contains details on the i

45、tems CIFAR includes in the various categories. In addition to scoring accounting policy disclosures, CIFAR also measures the comprehensiveness of the basic financial statements as well as the extent of disclosures of general information, stockholders information and supplementary information. I comp

46、ute non-accounting policy disclosures as a weighted average of these categories. Consistent results obtain when using factor analysis to extract a composite measure.The CIFAR disclosure scores for both accounting policy disclosure scores and overall disclosure have undergone extensive validity tests

47、 (see Hope 2001; 2002a). For example, Frost and Ramins (1997) country-level rankings of accounting policy disclosures for five countries corroborate those of CIFAR. Comparing my own scoring of accounting policy disclosures against CIFARs for a sample of 21 firms indicates substantial overlap (correl

48、ation 0.82). I have also compared CIFARs overall disclosure scores vis-visvarious countries Best Annual Report Awards and with Botosans (1997) scores.These comparisons provide further support for the validity of the CIFAR scores. On the basis of these examinations, I conclude that the CIFAR scores c

49、apture meaningful variation in corporate disclosure.All data on analysts forecasts are from the IBES Domestic and International Summary.The mean forecast error and the standard deviation of forecasts are computed as the simple average across the fourth through sixth month following the fiscal year-end. For the forecast dispersion tests, the number of forecasts must exceed three. The focus of this study i