Mandatory vs. voluntary disclosure of management forecast in China

Xiaobai Zhang, Hu Dan Semba and Hong Xu

Asia-Pacific Journal of Accounting & Economics, 2021, vol. 28, issue 1, 133-152

Abstract: This study examines the difference in management forecast quality under mandatory vs. voluntary disclosure in China’s stock markets in terms of management forecasting error (MFE) and value relevance. The results of MFE tests reveal that the disclosure approach is significantly associated with forecast accuracy, and voluntarily disclosed forecasts are more accurate than mandatorily disclosed forecasts. In terms of value relevance, the results are also consistent with the belief that in China’s stock markets, management forecast quality under voluntary disclosure is higher than that under mandatory disclosure.

Date: 2021
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Persistent link: https://EconPapers.repec.org/RePEc:taf:raaexx:v:28:y:2021:i:1:p:133-152

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DOI: 10.1080/16081625.2020.1845003

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Asia-Pacific Journal of Accounting & Economics is currently edited by Yin-Wong Cheung, Hong Hwang, Jeong-Bon Kim, Shu-Hsing Li and Suresh Radhakrishnan

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