Article

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

Authors: Chee Seng Cheong (University of Adelaide) , Mahmud Al Masum (University of Adelaide)

Abstract

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

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

How to Cite: Cheong, C. & Al Masum, M. (2010) “Financial Analysts' Forecast Accuracy : Before and After the Introduction of AIFRS”, Australasian Accounting, Business and Finance Journal. 4(3).