Abstract
Research on the Financial Forecast System for the CentralizedMarket and OTC in TaiwanAdvisor：Li Cheng Chung Ph.D Student：Chang Jung-Hui Abstract The mandatory regulation enforced on Initial Public Offer companies (hereafter referred to as IPO) to announce their financial forecast information has entered into endless arguments since the practice on Dec. of year 1991.A lot of enterprisers expect such regulation of financial forecast announcement to the public to be abolished, but The Securities and Futures Commission Ministry of Finance, R.O.C. (hereafter referred to as SFC) insists on retention. This thesis is to analyze on the one hand whether the mandatory financial forecast system is reasonable or not, and on the other hand whether it should be abolished. Through the substantive analysis of the statistics from an investigative questionnaire made on the IPO companies in terms of the rationality and its retention on the mandatory financial forecast system, 82% of the companies agree with abolishment. The IPO companies might be reformed by SFC in case that the companies do not update the forecast on real time. Their applications for cash injection will turn to be approval system under the circustances of reformations by SFC twice within the application year and the last two years or forecast revisions over two times within any fiscal year while the IPO companies apply for cash injection. The lowest weight-average at 2.47 shown from the questionnaire is regarded to be inadequate and extremely unreasonable. According to the Economic Daily News [the third edition on 19 July 1992], the CPA from Diwan Ernst Young firm was interviewed and said that CPA firms have been expecting that SFC did not request CPA's to review financial forecast statement due to various factors, which affected financial forecast. Take the USA for example, mandatory regulation of such forecast announcement is not made. However, till now SFC and CPAs are far away with their opinions.In a word, CPA's carry the same opinion with IPO companies. They all agree to cancel the mandatory regulation, which can provide SFCwith a reference for revising regulations in the future.