| Summary: | 碩士 === 東吳大學 === 會計學系 === 92 === Taiwan’s regulation forces listed and OTC companies to disclosing financial forecast information, but listed and OTC companies renew their financial forecast frequently in Taiwan. Since those information disclosed by company is not only dependable but also easy to accessed by investor, this paper use the information disclosed by company to examine the phenomenon of renew the financial forecast downward. The research data are collected from Market Observation Post System.
1. The achievement rate against the forecast figures fore the forecast quarter.
2. financial forecast revised frequency.
3. The holding ratio and the pledged ratio of the stock of the insider.
The empirical result has confirmed that the achievement rate, revised frequency and the insider pledged ratio actually of companies can help investor to expect if listed and OTC companies will renew downward financial forecast in the year.
Besides, those companies who renew their financial forecast and reverse their pretax net income from positive to negative will be examined by TSE in accordance with “Taiwan Stock Exchange Corporation Procedures for Review of Financial Report by Listed and OTC company”. Therefore, this paper considers the regulation as another form of renewal thresholds. The empirical result suggests that companies forecasting their pretax net income to be positive will manipulate positive earnings management to maintain net income positive in order to evade that regulation.
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