Abstract

This study assesses the influence of discretionary accounting changes on finan-cial analysts ’ individual forecast errors in the Netherlands from 1988 to 1996. It contributes to previous research by examining whether accounting changes (1) influence analysts ’ earnings forecast accuracy because of the change in the time series of earnings; and (2) change analysts ’ forecasting superiority relative to me-chanical earnings prediction models. The empirical results indicate that changes in accounting procedures significantly affect analysts ’ forecast accuracy and fore-casting superiority.