In Accuracy of Management Earning Forecast in IPO Prospectuses
Companies going public in Iran include a forecast of next year's profit in their prospectuses. Investors use this information for their future decision. Accuracy of the forecast is crucial because it seems to be a credible signal for long-term performance of stocks. In this study we examine...
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| Format: | Article |
| Language: | fas |
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Allameh Tabataba'i University Press
2005-06-01
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| Series: | مطالعات تجربی حسابداری مالی |
| Online Access: | https://qjma.atu.ac.ir/article_4124_923d5a1e469bcf6d88cf20c04dbbffe1.pdf |
| _version_ | 1797378381662126080 |
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| author | Hamid Khaleghi Moghadam Mahmood Bahramian |
| author_facet | Hamid Khaleghi Moghadam Mahmood Bahramian |
| author_sort | Hamid Khaleghi Moghadam |
| collection | DOAJ |
| description | Companies going public in Iran include a forecast of next year's profit in their prospectuses. Investors use this information for their future decision. Accuracy of the forecast is crucial because it seems to be a credible signal for long-term performance of stocks.
In this study we examine the accuracy of management profits forecasts contained in prospectuses of companies newly listing on the Tehran Stock Exchange. For that reason four different forecast error metrics, forecast error, absolute forecast error, squared forecast error and superiority of management forecast are considered.
The interesting feature in this paper is the mandatory status of Tehran market for the disclosure of earning forecast in the prospectuses of the companies and the motivation is that there is no previous literature covering forecast earning accuracy. Data set consists of 81 IPOs, which were floated, in the Athens Stock Exchange during March 2000 to February of 2002.
In order to test a number of company specific characteristics, for the accuracy of Tehran IPO management earnings forecasts we conduct a regression analysis .We apply a cross sectional model to explain variations in accuracies but it has very weak significant power. Our results suggest that investors are able to anticipate forecast errors at the time of listings. Investigation on independent variables, influencing the forecast accuracy show that three factors named horizon of the IPO' (HOR), Economic Condition (ECON), Age of Firm (AGE) are significant determinants. |
| first_indexed | 2024-03-08T20:06:06Z |
| format | Article |
| id | doaj.art-71cfa24e12e34e5db846d4b40fa9e205 |
| institution | Directory Open Access Journal |
| issn | 2821-0166 2538-2519 |
| language | fas |
| last_indexed | 2024-03-08T20:06:06Z |
| publishDate | 2005-06-01 |
| publisher | Allameh Tabataba'i University Press |
| record_format | Article |
| series | مطالعات تجربی حسابداری مالی |
| spelling | doaj.art-71cfa24e12e34e5db846d4b40fa9e2052023-12-23T10:33:01ZfasAllameh Tabataba'i University Pressمطالعات تجربی حسابداری مالی2821-01662538-25192005-06-013101284124In Accuracy of Management Earning Forecast in IPO ProspectusesHamid Khaleghi Moghadam0Mahmood Bahramian1عضو هیئت علمی دانشگاه علامه طباطباییکارشناس ارشد حسابداریCompanies going public in Iran include a forecast of next year's profit in their prospectuses. Investors use this information for their future decision. Accuracy of the forecast is crucial because it seems to be a credible signal for long-term performance of stocks. In this study we examine the accuracy of management profits forecasts contained in prospectuses of companies newly listing on the Tehran Stock Exchange. For that reason four different forecast error metrics, forecast error, absolute forecast error, squared forecast error and superiority of management forecast are considered. The interesting feature in this paper is the mandatory status of Tehran market for the disclosure of earning forecast in the prospectuses of the companies and the motivation is that there is no previous literature covering forecast earning accuracy. Data set consists of 81 IPOs, which were floated, in the Athens Stock Exchange during March 2000 to February of 2002. In order to test a number of company specific characteristics, for the accuracy of Tehran IPO management earnings forecasts we conduct a regression analysis .We apply a cross sectional model to explain variations in accuracies but it has very weak significant power. Our results suggest that investors are able to anticipate forecast errors at the time of listings. Investigation on independent variables, influencing the forecast accuracy show that three factors named horizon of the IPO' (HOR), Economic Condition (ECON), Age of Firm (AGE) are significant determinants.https://qjma.atu.ac.ir/article_4124_923d5a1e469bcf6d88cf20c04dbbffe1.pdf |
| spellingShingle | Hamid Khaleghi Moghadam Mahmood Bahramian In Accuracy of Management Earning Forecast in IPO Prospectuses مطالعات تجربی حسابداری مالی |
| title | In Accuracy of Management Earning Forecast in IPO Prospectuses |
| title_full | In Accuracy of Management Earning Forecast in IPO Prospectuses |
| title_fullStr | In Accuracy of Management Earning Forecast in IPO Prospectuses |
| title_full_unstemmed | In Accuracy of Management Earning Forecast in IPO Prospectuses |
| title_short | In Accuracy of Management Earning Forecast in IPO Prospectuses |
| title_sort | in accuracy of management earning forecast in ipo prospectuses |
| url | https://qjma.atu.ac.ir/article_4124_923d5a1e469bcf6d88cf20c04dbbffe1.pdf |
| work_keys_str_mv | AT hamidkhaleghimoghadam inaccuracyofmanagementearningforecastinipoprospectuses AT mahmoodbahramian inaccuracyofmanagementearningforecastinipoprospectuses |