Abstract: This study from viewpoint of information disclosure with a model of client-agency investigates the relation between information disclosure and earnings management.Our analysis indicates that information forecasts can decrease the information asymmetry between managers and owners;managers should take on an additional cost for their deliberate forecasting of inaccurate information.So information forecasts of managers can (reduce) the possibility of earnings management.Our empirical analysis proves the view.

Key words: information disclosure, information forecasts, earnings management, information asymmetry