| Summary: | 碩士 === 東海大學 === 財務金融學系 === 95 === Taiwan government implements the mandatory financial forecast policy since May, 1991, but investors can not understand the financial forecast information effectively and objectively because the forecasting quality is not coherent. Thereby the government institutions adopted the voluntary disclosure on January 1, 2005. We select the voluntary disclose forecast companies listed on the Exchange House and OTC from 2005 to 2006 to investigate which are the deciding voluntary disclosure of financial forecast factors, as well as the information content and predictive ability of pro forma earnings.
We find some firms which are with better earnings quality, higher debt to equity ratio, higher intangible to total assets ratio and better performance will have higher willing to do voluntary disclosure. By releasing the financial forecast, they hope to reduce the agency problem with outside investors and simultaneously avoid them underestimating company’s value.
Additionally, we also investigate the information content and predictive ability of the voluntary pro forma earnings. We find the pro forma earnings have information content and under this, pro forma earnings have the predictive ability to future earnings but not to future return.
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