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Financial Analysts' Forecast Accuracy : Before and After the Introduction of AIFRS

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Author(s): Chee Seng Cheong | Mahmud Al Masum

Journal: Australasian Accounting Business and Finance Journal
ISSN 1834-2000

Volume: 4;
Issue: 3;
Start page: 65;
Date: 2010;
Original page

Keywords: Analysts’ forecasts | AIFRS | Forecast errors | Intangible assets

ABSTRACT
We examine whether financial analysts’ forecast accuracy differs between the pre- and post- adoption ofAustralian Equivalents to the International Financial Reporting Standards (AIFRS). We find that forecastaccuracy has improved after Australia adopted AIFRS. As a secondary objective, this paper also investigatesthe role of financial analysts in reducing information asymmetry in today’s Australian capital market. We findweak evidence that more analysts following a stock do not help to improve forecast accuracy by bringingmore firm-specific information to the market.
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