Study On Internal Control Quality、Earnings Quality And The Accuracy Of Analysts’ Forecasts

In 2008, The Ministry of finance, Securities Regulatory Commission and other five ministries jointly issued the "The basic standard for enterprise internal control", marking the first comprehensive basic guidelines of Internal control in China. With this basic specification, the scholars of our country turns on the economic consequences of the internal control, and large numbers of research literature appeared. Not only the study of internal economic consequences about internal control, or the study of its external economic consequences, scholars shows less attention on the important group on the stock market-securities analyst, only little of the scholars researched internal control and securities analyst together, this provides an opportunity for our study. As an important link of listing Corporation and small investors, Securities analysts play the important role of analysis and forecast. Internal control is the important information of character, absoluteiy will cause the attention of securities analysts, the quality of internal control will inevitably affect the securities analyst’s forecasts when the decision. So it is meaningful to study the relationship between them.In particular, some scholars make a simple research on the relationship between them, the results show that the internal control will influence the securities analyst’ forecast and behavior to some extent, but theoretically, when referring to the securities analyst, financial reports will be the key to securities analyst, because it will influence prediction of the securities analyst more directly, scholars in their study did not study the path of the effect from the internal control quality to the accuracy of securities analysts’ forecast, which is demonstrated in this paper. Based on existing literature, this paper selects the earnings quality as an alternative variable quality of financial reporting, as the intermediary, to study the path of the effect from the internal control quality to the accuracy of securities analysts’ forecast.Based on the basic idea, this paper will set up a simultaneous model to test the mediating role selecting the original sample of listing Corporation in Stock Exchange of Shanghai and Shenzhen,2013. The results show that the higher the quality of the internal control of listing Corporation, the more accurate of a securities analyst’s earnings forecast, and the earnings quality plays a very significant role of intermediary between them. namely, the internal control quality has impact on the forecast of securities analyst through the path of to the impact of earnings quality to a large extent. Finally, according to the conclusion of the study, we make policy recommendations from three angles:the regulatory agencies, listing Corporation itself, securities analyst itself, and proposed the limitations existed in this study, hoping for in-depth study in the future exploration practice.