||This study is based on Bergman & Roychowdhury’s reserch and explore the relationship between investor sentiment and domestic firm’s voluntary financial forecasts. In 2005, Taiwan’s financial earnings forecast system changing form mandatory financial earnings forecast to voluntary financial earnings forecast. Until now, it has been almost ten years. In the past, the literature about voluntary financial forecasts almost discuss about investigating the factor which can affect company disclosing financial forecasts and accuracy of voluntary financial forecasts. In this study, we try to connect investor sentiment and voluntary financial forecasts, and then we investigate how investor sentiment affect companies’ willing to disclose their financial forecasts. Finally, we compare the analysts’ financial forecasts and try to find out why companies disclosing their financial forecasts.|
Our empirical results show that the lower the investor sentiment, the company’s willingness which issue their voluntary financial forecasts will be lower, both of which showed a significant positive correlation. And after compared with analysts’ forecasts, we can’t find any different between more optimistic and more pessimistic financial forecasts from companies.
Finally, this study compared company′s annual financial statements and voluntary financial forecasts and we found that the lower the investor sentiment, the company will be more willing to issue optimistic financial forecasts.
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