Asymmetric Information: Tinjauan Berdasarkan Rekomendasi Analis Sekuritas dan Revisi Earning Forecast

Trading in the stock market occur due to differences in opinion on the expected value of the securities. In the other side, asymmetric information between investors and companies caused the stock price does not reflect the real price. So, asymmetric information should be reduced. Information by securities analysts is an information that is expected to reduce that. This study investigates the performance of securities analysts through its role in reducing asymmetric information. This is motivated by some previous studies that stated that the Indonesian capital market is inefficient, because high levels of asymmetric information. Analysts is considered as inform market participant who can reduce the asymmetric information so as to make capital market to be efficient. The role of securities analysts is seen through the product. There are stock recommendation and earnings forecast revision. Testing the consistency of the analyst's stock recommendations and earnings forecast revision before testing their impact on asymmetric information. The results showed that output in the form of stock securities analysts and earnings forecast recommendation are consistent but has not been able to reduce the asymmetry of information that occurs between investors and companies.

The Accuracy of Earning Forecast Analysis, Information Asymmetry and Integrated Reporting – Case of Indonesia

The purpose of this study is to examine factors that affect companies presents the elements of integrated reporting in their annual reports and how its effect on the accuracy of earnings forecast analysis and information asymmetry. The independent variables tested were institutional ownership, company size, profitability, international activities, and industry type and growth opportunity. The study population is non-financial companies listed on the Indonesia Stock Exchange in 2015. The samples were taken by using purposive sampling i.e. with some specific criteria. The data was analysed by using multiple regression analysis to examine the factors affecting the company presents the elements of integrated reporting in the annual report, and a simple regression to see how the presentation of the elements of integrated reporting affect the asymmetry of information and the accuracy of earnings forecast analysis. This study found that only the size of the companies determines the presentation of the elements ofintegrated reporting in the annual report. In addition, this study does not confirm the effect of the presentation of the elements of integrated reporting on the information asymmetry and the earnings forecast analysis accuracy.

Has Sarbanes-Oxley standardized audit quality?

Purpose The purpose of this paper is to examine whether the institutional changes accompanying the passage of the Sarbanes-Oxley Act of 2002 (SOX) have standardized the audit’s role in the overall financial reporting process, thereby reducing the impact of auditor characteristics on financial reporting quality. Design/methodology/approach To test this hypothesis, the association between audit quality characteristics (auditor size and industry expertise) and measures of financial reporting quality (analyst earning forecast dispersion and accuracy) are estimated using regression analysis. Results of this analysis are compared across the pre- and post-SOX periods. Findings The results of the study document a significant relationship between auditor size (Big N vs non-Big N) and financial reporting quality (as proxied by analyst earnings forecast properties) during the pre-SOX period but not in the post-SOX period. Auditor industry expertise is significantly associated with financial reporting quality throughout the entire sample period. Thus, financial reporting quality continues to be dependent on the degree of specialization of an audit firm in both the pre- and post-SOX periods; however, the impact of auditor size as a surrogate for quality has diminished. Originality/value The SOX Act of 2002 represented one of the most significant changes in the regulation of audits. This paper adds to the literature by examining the Act’s effects on financial professionals’ perception of the impact of audit firm characteristics on their client’s financial reporting quality.

The association between corporate governance and corporate disclosure: A critical review

This study provides a critical review of different techniques used in recent accounting literature to investigate the association between corporate governance and corporate disclosure. Therefore, the main purpose of this study is to help future researchers to identify examples and to select suitable practices or to develop their own ones. It also provides contest of current issues related to the relationship between corporate disclosure and corporate governance and identifies gaps in the current literature that future research may aim to cover. The study examines 34 articles published during the 2007-2013 period. The review of these articles concludes that most of these published studies examined the association between corporate disclosure and one or more of board of directors, ownership construction and audit firm. The current study suggests that researchers can also examine the association between internal audit quality as an internal governance and corporate disclosure. The study reveals that researchers used a disclosure index and content analysis to measure corporate disclosure. However, other techniques can be applied as management earning forecast and the number of analysts.

THE DETERMINANTS OF MANAGEMENT FORECASTS ERROR AND THE IPO UNDERPRICING: A CASE STUDY OF INDONESIAN IPO

To reduce the well-known information asymmetry in the IPO market, the issuing firms are required to publish offering prospectuses. One type of information disclosed in the prospectus is the management financial forecasts in which the IPO firms predict expected earnings at the end of year after the listing. The purpose of this study is to investigate the determinants of forecasted error published by the management in the IPO prospectuses. This study observes six possible determinants that affect the absolute forecast errors (AFE). Furthermore, this study also examines whether the earning forecast errors could explain the IPO stylish underpricing phenomenon.A sample of 124 IPO firms that went public in Indonesian Stock Exchange (prior Jakarta Stock Exchange) during the 1997 – 2005 period. The results show that the research models proposed are valid models. The management AFE is determined by firm size, forecast interval period, industry, and the firm business range. This study also finds that the AFE is positively related to the IPO underpricing, suggesting that the higher the forecast errors, the more underpriced is the IPO. Moreover, it is also found that market condition also influences the underpricing level in Indonesian IPO market.