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Risk information disclosure and its impact on analyst forecast accuracy

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  • José Miguel Tirado-Beltrán
  • J. David Cabedo-Semper

Abstract

This paper aims to analyse the influence of risk information disclosure on the accuracy of financial analysts’ earnings forecasts for the Spanish stock market. To do this, we performed a regression analysis with panel data on a sample comprised of non-financial firms listed on the Madrid Stock Exchange from 2010 to 2015. The results of the study show that risk information disclosed by firms does not help to reduce analysts’ uncertainty levels nor enable them to make more accurate forecasts of future profits. Furthermore, separately testing verified and unverified risk information disclosure confirms that there is no relationship between the risk information disclosed and the perception that analysts have on companies’ levels of risk.

Suggested Citation

  • José Miguel Tirado-Beltrán & J. David Cabedo-Semper, 2020. "Risk information disclosure and its impact on analyst forecast accuracy," Estudios Gerenciales, Universidad Icesi, vol. 36(156), pages 314-324.
    • Handle: RePEc:col:000129:018451
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    File URL: https://www.icesi.edu.co/revistas/index.php/estudios_gerenciales/article/view/3774
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    References listed on IDEAS

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    1. Vivien Beattie & Bill McInnes & Stella Fearnley, 2004. "A methodology for analysing and evaluating narratives in annual reports: a comprehensive descriptive profile and metrics for disclosure quality attributes," Accounting Forum, Taylor & Francis Journals, vol. 28(3), pages 205-236, September.
    2. Hollis Ashbaugh & Morton Pincus, 2001. "Domestic Accounting Standards, International Accounting Standards, and the Predictability of Earnings," Journal of Accounting Research, John Wiley & Sons, Ltd., vol. 39(3), pages 417-434, December.
    3. Sudipta Basu & LeeSeok Hwang & Ching‐Lih Jan, 1998. "International Variation in Accounting Measurement Rules and Analysts’ Earnings Forecast Errors," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 25(9‐10), pages 1207-1247, November.
    4. Khaled Aljifri & Khaled Hussainey, 2007. "The determinants of forward-looking information in annual reports of UAE companies," Managerial Auditing Journal, Emerald Group Publishing, vol. 22(9), pages 881-894, October.
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    Keywords

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    JEL classification:

    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting
    • M49 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Other

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