Financial Analysts' Forecast Revisions as Evidence of the Usefulness of Form 20f Reconciliations and Disclosures

41 Pages Posted: 12 Apr 1999

See all articles by Irene Karamanou

Irene Karamanou

University of Cyprus - Department of Public and Business Administration

Jana Smith Raedy

University of North Carolina at Chapel Hill

Date Written: April 5, 1999

Abstract

This paper contributes to the ongoing debate resulting from the SEC's requirement that foreign firms that trade on US exchanges reconcile their domestic financial statements to US GAAP. We address this issue by examining whether financial analysts revise their earnings forecasts following the filing of the 20F information. Since analysts are among the most informed market participants, their use (or lack of use) of the Form 20F information should provide direct evidence regarding the relevance of the 20F. Our results support that analysts use the earnings reconciliations contained in Form 20F, but we find no evidence that analysts use the equity reconciliations contained therein. We also find no evidence that analysts use the additional (item 18) US GAAP disclosures in Form 20F.

JEL Classification: M41, M45, G29

Suggested Citation

Karamanou, Irene and Smith Raedy, Jana, Financial Analysts' Forecast Revisions as Evidence of the Usefulness of Form 20f Reconciliations and Disclosures (April 5, 1999). Available at SSRN: https://ssrn.com/abstract=159369 or http://dx.doi.org/10.2139/ssrn.159369

Irene Karamanou

University of Cyprus - Department of Public and Business Administration ( email )

75 Kallipoleos Street
P.O. Box 20537
Nicosia CY-1678
CYPRUS
+357 2 892471 (Phone)
+357 2 892460 (Fax)

Jana Smith Raedy (Contact Author)

University of North Carolina at Chapel Hill ( email )

McColl Building
Chapel Hill, NC 27599-3490
United States
919-962-7475 (Phone)
919-962-4727 (Fax)

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