The association between the accuracy of long-run qualitative earnings forecasts by managers and discretionary accounting in the Netherlands

Many earnings forecasts studies are conducted for the Anglo-Saxon countries, but to date very few have focused on continental Europe. This paperexamines whether there is a relationship between discretionary accounting and the accuracy of long-run forecasts of annual earnings voluntarilydisclosed by managers in the directors' report, which is a mandatory chapter of the annual report in the Netherlands. Long-run forecasts mean forecastsmade at least seven months before year-end. First, we discuss the rationale for management's incentive to improve the accuracy of earnings forecastsvoluntarily di... Mehr ...