Public regulatory reform and management earnings forecasts in a low private litigation environment
We examine the impact of continuous disclosure regulatory reform on the likelihood, frequency and qualitative characteristics of management earnings forecasts issued in New Zealand’s low private litigation environment. Using a sample of 720 earnings forecasts issued by 94 firms listed on the New Zealand Exchange before and after the reform (1999–2005), we provide strong evidence of significant changes in forecasting behaviour in the post-reform period. Specifically, firms were more likely to issue earnings forecasts to pre-empt earnings announcements and, in contrast to findings in other legal settings, those earnings forecasts exhibited higher frequency and improved qualitative characteristics (better precision and accuracy). An important implication of our findings is that public regulatory reforms may have a greater benefit in a low private litigation environment and thus add to the global debate about the effectiveness of alternative public regulatory reforms of corporate requirements.
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|Item Type:||Journal Article|
|Keywords:||Public regulatory reform, private litigation, continuous disclosure, management earnings forecasts|
|Subjects:||Australian and New Zealand Standard Research Classification > COMMERCE MANAGEMENT TOURISM AND SERVICES (150000) > ACCOUNTING AUDITING AND ACCOUNTABILITY (150100) > Auditing and Accountability (150102)|
|Divisions:||Current > QUT Faculties and Divisions > QUT Business School|
Current > Schools > School of Accountancy
|Copyright Owner:||Copyright © 2010 John Wiley & Sons, Inc.|
|Copyright Statement:||© 2010 The Authors. Accounting and Finance © 2010 AFAANZ -- -- The definitive version is available at www3.interscience.wiley.com|
|Deposited On:||24 Feb 2011 09:00|
|Last Modified:||01 Mar 2012 00:33|
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