실제이익조정과 경영자 이익예측 정확성

초록

With the adoption of Fair Disclosure Regulation in 2002, stakeholders of Korean firms can use earnings forecasts containing management’s private information for their decision making. If management earnings forecasts become useful, they should be reliable in the first place. There are negative evaluations of firms that provide unreliable forecasts information to a capital market. The negative evaluation of a market leads to downside movement of stock prices. There are management’s incentives to avoid market’s negative evaluation through earnings management of earnings forecast’s reliability level. Consistent with this view, we analyze the relationship between real earnings management and reliability of forecasts information. The results show that management improve the reliability of forecasts information by real earnings management. In addition, the association between real earnings management and reliability of forecasts information become stronger in the higher level of debt ratio. The current controlling shareholders of firms do not manage real earnings for improvement of the forecasts reliability, because real earnings management has a negative effect on the long-term operating performance. This study contributes to the literature in several ways. Prior studies analyzed forecasts information from a viewpoint of information relevance. Analyzing forecasts information from a viewpoint of information reliability is the first contribution of this study. The second contribution of this study is to provide an additional empirical evidence that management has real earnings management incentive for forecast accuracy. Prior studies’ results confine mostly to a negative effect of real earnings management on long-term operating performance. Therefore, this study provides important implications to stakeholders that use earnings forecasts.

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