Recent accounting regulations appear to be improving the accuracy of companies’ earnings forecasts. The percentage of companies among the Standard & Poors 500 stock index that missed analysts’ earnings-per-share projections by at least 10% fell to 29.7% in the 2004 third quarter. That’s the lowest level since financial management consultancy, Parson Consulting, began the quarterly study in the 2003 first quarter.
The decline in the wide-margin misses suggests that the Securities and Exchange Commission’s (SEC) accelerated reporting deadlines and federal Sarbanes-Oxley Act is having a beneficial effect.
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