Research On The Impact Of Analyst Coverage And Analyst Reputation On The Transparency Of Accounting Information

Information disclosure is one of the effective ways to alleviate the information asymmetry and principal-agent problems. Transparent information disclosure is the precondition of effective operation of corporate governance mechanism, helps to strengthen external market constraints on the behavior of enterprise internal controllers, and is of significant importance to investor protection and efficient allocation of resources. Studies on the influence factors of the accounting information transparency have been hot issues in the academic research in financial accounting. Basing on the principal-agent theory, signaling theory and reputation theory, and considering analysts as a part of the external governance mechanism, this dissertation uses theoretical and empirical analysis methods to investigate the impact of analyst coverage and analyst reputation on the transparency of accounting information.This dissertation contains five parts. First of all, in the introduction, this dissertation introduces the background, significance, ideas and methods of this research, and reviews pertinent literature on the influence factors of accounting information transparency and the economic consequences of analyst following. In the second part, we define related concepts involved in this study and expound fundamental theories such as principal-agent theory, signaling theory and reputation theory, etc. The third part overviews the quality of accounting information disclosure in China and present development situation of analysts industry, and then analyzes how analyst coverage and analyst reputation affect the transparency of accounting information. Basing on the analyzing, the third part put forward two research hypotheses. In the fourth part, this dissertation build a model in reference to related literature, and introduce the measurement of research variables involved. Using6134firm-year observations from companies listed in Shenzhen Stock Exchange from2003to2012as sample, the dissertation experiments some empirical tests to examine the hypotheses which are put forward in the third part, and results show that analyst following and analyst reputation are significantly positively related to the transparency of accounting information, and the results are essentially unchanged after controlling probable endogenous problem. Finally, according to the analysis of the empirical test results, the part five concludes:(1) As an important external governance mechanism, the analysts play a role in the supervision and constraint on managers, and significantly increase the transparency of accounting information of listed companies.(2) As a signal of the professional skill and professional ethics of an analyst, analyst reputation significantly promotes the accounting information transparency of a company.