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Listed real estate company voluntary information disclosure issues profit forecast

Author: JiangPing From: www.yourpaper.net Posted: 2009-12-01 15:52:45 Read:
[Abstract] listed companies to voluntarily disclose earnings forecast information can improve the effectiveness of the decision-making and evaluation of information users, and is conducive to reducing the company's cost of capital and reduce social transaction costs and improve the efficiency of the securities market. There are fewer and less robust, and poor reliability in the process of voluntary disclosure of earnings forecasts. This article provides an overview of our earnings forecasts voluntary disclosure of the status quo and its usefulness for the profit forecast of China's real estate listed companies to voluntarily disclose the existence problem analysis is willing and proposed improvement measures to improve the quality of earnings forecasts disclosed.
[Keywords] earnings forecast voluntary information disclosure of listed companies real estate

The earnings forecast is to predict the main based production planning and operating environment, and give full consideration to the factors of the forecast period may affect the future economic benefits and increased profits and less profits, based on certain assumptions and benchmarks, the future of one or several of the accounting period the profitability of your expected and estimates. The real estate industry is a capital-intensive industry, financing is the main problem of troubled many enterprises. The real estate market because of a congenital defect of the financial system, the main form of indirect financing for the bank. The tightening of bank credit policies and measures were introduced, the impact to the sustained and healthy development of the real estate finance. Equity financing for real estate companies with capital integration mode, listed real estate companies through equity financing, there are a lot of difficulties. A very important reason is that real estate listed companies in the information on the voluntary disclosure of earnings forecasts there is the problem, the urgent need to analyze the reasons for problems proposed change
Into measures.

Our earnings forecast status quo and its usefulness

Currently, our earnings forecast information disclosed is a voluntary disclosure principles, mainly in the initial public offering prospectus of the Company and has been listed on the company's Annual Report.
The content and format of the prospectus Standards provides: "If the issuer or its financial advisers or underwriters that provide earnings forecast data will help investors to make a correct judgment of the issuer and its issued stock, The issuer is satisfied that there are able to make a more realistic forecast of future profitability during the issuer can be provided in the prospectus profit forecast data. Earnings forecasts should be based on reasonable assumptions, general economic conditions, business environment, market conditions, the issuer production and operation conditions and the financial condition, in accordance with the normal pace of development of the issuer, made the principle of prudent ".
Annual report content and format guidelines provides that: "in principle, require the company to the preparation of the new year profit forecast, but the company provided in the annual report next year's profit forecast, profit forecast must be engaged in securities related business qualified certified public accountants to audit and express their views. "
The above provisions make it clear that in our profit forecast is a selective disclosures, or based on the disclosure of major earnings forecast information is to help investors in their decisions and whether the issuer has the ability to make realistic predictions.
In market economy conditions, the objective of a listed company, in good faith disclosure predictive information, both from a micro and macro have important practical significance.
First of all, help to improve the effectiveness of the decision-making and evaluation of information users. Listed companies disclose only historical information, making the information asymmetry between investors and listed companies greatly deepen some insider can obtain future information for improper gains from the market. For external users, the listed companies to disclose the predictive information can make up for the defects of the traditional financial reporting, help to reduce the problem of information asymmetry between investors and company management authorities.
Secondly, it is conducive to reducing the company's cost of capital. Earnings forecast information disclosure of listed companies, and help to reduce the problem of information asymmetry between investors and their also reduce the uncertainty associated with the investors, creditors and the expected return on investment, and debt capital will translate into lower interest rates, sovereign funds, which will translate into a higher price per share. Predicted higher future earnings, will enable the company related parties have more confidence with the company, so that the supply of raw materials and product sales more secure, more convenient to carry out commercial credit. Especially when the case of a temporary liquidity difficulties, but once the tide over the difficulties to obtain good effective to provide a profit forecast information of direct significance.
Efficient allocation of resources in social capital can achieve maximum rate of return, securities prices more truly reflect the listed company's future prospects and the true value of the securities of the company, but also can prevent a small number of personnel to grasp the insider information to a certain extent seek improper benefits, thus contributing to more efficient operation of the securities market.

Second, China's real estate listed companies profit forecast to voluntarily disclose the existence of problems and their causes

I believe that China's real estate listed companies in the the predictive information disclosure on mainly two issues: First, a listed real estate company less profit forecast disclosed; Second, the lower the soundness of the listed real estate company earnings forecasts.
(A) a listed real estate company earnings forecasts disclosed less
Thinking and understanding is not in place. China's real estate listing to a late start, lack of understanding of disclosure of earnings forecasts, in: think of such information disclosure would increase operating costs, including the information collection, collation, processing and auditing costs; the predictive information disclosure may disclose listed the company's trade secrets; predictive information disclosure would affect the normal behavior of the operators of the listed companies.
Related systems enough reasonable implementation of voluntary disclosure, the listed real estate companies can choose according to their own circumstances whether earnings forecast information disclosure, but if you choose to disclose earnings information on a larger deviation, listed companies must causes of explanation and a public apology, the deviation is significant, in addition to explain and apologize, ex post facto review of prison policy will have to accept. Intentionally false earnings forecast report issued misleading investors, once verified, will be in accordance with the relevant rules of listed companies be punished. This shows that the non-disclosure without any problems, and forecast are not allowed for whatever reason need to make a public apology, which of the listed companies release earnings forecasts, undoubtedly bear the risk of reputation, therefore, information disclosure unless the profit forecast can bring enormous benefits for the company, and otherwise listed real estate companies are not willing to be disclosed.
(B) of the listed real estate company earnings forecasts sound less and less reliable
If reliability can not be guaranteed, the usefulness (relevance) not only greatly reduced, and may even lead to misleading bring significant losses to investors. Therefore, the reliability of the profit forecast information of listed companies in the life, is a concentrated expression of the quality of the earnings forecast information. Due to the influence and role of all relevant factors, listed real estate company announced earnings forecast reliability of information quality level is not high, the main motive of profit-driven information disclosure of listed companies to manipulate predictive. Companies to manipulate earnings forecast information, direct benefits to lower the cost of capital to raise funds; can reduce the risk of mergers and acquisitions; can establish a good image of the company in a superior position in the fierce market competition. Company to manipulate earnings forecast information, and also allows the company to get a lot of indirect benefits: help the company establish a good corporate image, and create good conditions for the production and management company, and thus in a good position in the fierce competition in the market. Therefore, real estate listed companies interested in the disclosure of false earnings forecast information.
The accounting system is imperfect, and seriously affect the information disclosed. The predictive including development plans and earnings forecast, and our existing predictive information in the financial system, only "Independent Audit Practice Bulletin No. 4 - the earnings forecasts audit", the lack of information on the entire predictive Audit Guidelines. In addition, China's relevant laws and regulations of the earnings forecast information generated by the system specification is not enough, there has been no specific accounting standards in this regard.
Earnings forecast information disclosure of listed companies in China to implement the information intermediaries mandatory audit system, certified public accountants audit is to ensure that the profit forecast an important measure of the quality of the information. China's CPA industry is very irregular, sometimes not in accordance with the independent, objective and impartial manner audit, resulting in the listed companies to manipulate earnings forecast behavior can be achieved.
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