ABSTRACT
This study examines the accuracy of earnings forecasts released by both managers and analysts. Analysts’ forecasts are available to the public. However, most managers do not release earnings forecasts to the public. Although the Securities and Exchange Commission (SEC) mandated many disclosures to be issued by managers, earnings forecasts by managers are not mandated yet. The question is: should the SEC mandate disclosure of earnings forecasts by managers? If management forecasts are more accurate than analysts’ forecasts and give better information to the market, then management forecasts should be mandated. To answer this question, this study compares the accuracy of management earnings forecasts to analysts’ earnings forecasts. This study examines all types of earnings forecasts. The results show that management forecasts are more accurate than analysts’ forecasts if the forecast was point estimate. Other types of management forecasts are less accurate. In addition, forecasts were issued with other news are less accurate than forecasts were issued alone.
Keywords
Earnings, Forecasts, Management, Analysts