What question did this study set out to answer?

This evaluation aims to determine if current management earnings forecasts are indicative of all firms’ forecasts if made mandatory.

March 18, 2026

The Representativeness of Management Earnings Forecasts.

Key Points

This evaluation aims to determine if current management earnings forecasts are indicative of all firms’ forecasts if made mandatory.
Analyzed attributes of firms that produce earnings forecasts.
Conducted statistical tests on existing published management earnings forecasts.
Assessed the representativeness of the current forecasting data.
Previous research may not support a sound policy decision on mandatory forecasting.
Findings indicate a lack of representativeness among current forecasts.
Tests show variation in attributes of firms producing forecasts.

Abstract

Abstract ABSTRACT: Discussion regarding whether to require management to make earnings forecasts public has been based, in part, on the existing evidence concerning published management earnings forecasts. This article evaluates certain attributes of forecast firms in an effort to determine whether currently produced forecasts are representative of what might be produced by all firms if forecasts were mandatory. The results of the various tests all suggest that previous research findings may not provide a sound basis for a policy decision on forecasting.

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Discussion

Journals

The Accounting Review

Institutions

University of Michigan

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