Asia-Pacific Journal of Business (아태비즈니스연구)

KNU The Institute of Management & Economy Research (강원대학교 경영경제연구소)
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Analysts' Cash Flow Forecasts and Accrual Anomaly

재무분석가의 현금흐름예측과 발생액 이상현상

  • Kim, Jong-Hyun (Department of Accounting and Tax, Hanyang University) ;
  • Chang, Seok-Jin (Department of Business and Administration, Daejin University)
  • 김종현 (한양대학교 회계세무학과) ;
  • 장석진 (대진대학교 경영학과)
  • Received : 2020.08.31
  • Accepted : 2020.09.21
  • Published : 2020.09.30
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Abstract

Purpose - The purpose of this study is to investigate whether financial analysts' cash flow forecasts mitigate the accrual anomaly. In addition, we examine whether the more accurate analysts' cash flow forecasts are the greater the decline of the accrual anomaly. Design/methodology/approach - Data used in the empirical tests are extracted through KIS-VALUE and FN-GUIDE, and the sample consists of firms listed on Korea Stock Exchange for 7 years from 2005 to 2011. We test the hypotheses using multiple regression analysis and we also estimate the regressions with the decile ranks of the explanatory variables to minimize the influence of outliers. Findings - We have failed to capture evidence that the provision of financial analysts' cash flow forecasts itself reduces the accrual anomaly. However, we find the accrual anomaly to be less severe when financial analysts provide more accurate cash flow forecasts. The findings are consistent in the regression models with the decile ranks as well as in the robustness tests that controlled the accruals quality. Research implications or Originality - This study contributes to the expansion of related studies in the Korea by providing empirical evidence partially that the financial analysts' cash flow forecasts mitigate the accrual anomaly.

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References

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