Investigation on the forecast difficulty and the effect of external financing on the relationship between conservatism and management earnings forecast errors

The main purpose of the present research is to determine the relationship between the management earnings forecast errors and conservatism level and then surveying about the effects of forecast difficulty, and external financing on this relationship. Regarding this, the financial information related to 147 stock firms, available during the period of study (2003-2015) were collected and analyzed using multivariate regression analysis. The results indicate that by reducing conservatism, earning forecast error will increase and on the other hand, by increasing the operating cycle of mentioned firms and earnings volatility and also difficulty of the prediction conditions, reducing accounting conservatism have led to the rise in earnings forecast errors by managers, and the results reveal, during external financing, the negative impact conservatism on management earnings forecast errors will be intensified.