The Effect of Regulatory Alteration on Management Earnings Forecast?

Dimitrios Gounopoulos, Arthur Kraft, Frank Skinner

Research output: Contribution to specialist publicationArticle


In 1999 Kotsovolos, the leading Electronics Supplier in Greece, reported in its initial public offering prospectus an earnings forecast that missed its actual earnings, as announced by its first annual report, by 234%. This inaccuracy is attributed to the mandatory disclosure requirement imposed by the Hellenic Capital Market Commission, which obligated every firm going through an IPO to predict its next year’s earnings regardless of its ability to do so. Ultimately, repeated failures to achieve accurate earnings forecasts led to a lifting of the obligation to forecast earnings. Our new paper, Voluntary vs Mandatory Management Earnings Forecasts in IPOs, explores this regulatory change and provides empirical evidence of the accuracy of earnings forecasts in both mandatory and voluntary disclosure environments.
Original languageEnglish
Specialist publicationThe Columbia Law School Blog
Publication statusPublished - 1 Apr 2015


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