This study explores whether firms listed on the Taiwan Stock Exchange manipulate their mandatory management forecast errors (FE's) for fear of regulators' stop orders for the pending debt/equity offerings . We also examine the extent to which the 20% hurdle for FE's affects the significance of these FE's in explaining the magnitude of companies ' earnings management. Our empirical results support the notion of strategic manipulation. First, in our full, optimistic and pessimistic sample firms. companies' discretionary current accrual components (DCA's) in reported earnings are all significantly positive. Second, greater (less) DCA's appear to follow firms' optimistic (pessimistic) forecasts. Third, firms with negative (positive) pre-manipulation FE's appear to boost their security gains (losses). Consistently, DCA's for firms with percentage FE's immediately below 20% are significantly greater as opposed to those of the observations substantially beyond or below the hurdle.