Accounting Information Quality,Auditor Reputation And Analyst Earnings Forecast

Securities analysts are professional investors in the stock market,working on making a reliable prediction of listed companies’ profitability in the future.Data shows that the total amount of annual earnings forecast provided by securities analysts declined from 2013 to 2015.The number in 2013 is 28444,27575 in 2014,26136 in 2015,with 4.06%average annual reduction rate.Faced with the complex stock market environment,analysts’ earnings forecasts show a slight increase both in accuracy and differences.As users of annual financial reports,securities analysts play an important role in the analysis and interpretation of the annual financial reports.The annual reports of listed companies are of important value of information transmission and commercial value,which is an important basis for securities analysts to forecast earnings and rank stocks.This article embarks from the securities analysts’ opinion and research analysts’evaluation and response to annual financial statement accounting information quality in earning forecast way.At the same time,this article shall study that whether the audit of high reputation of accounting firms promote this evaluation and response or not.This paper reviews and summarizes the current research status of related issues at home and abroad.On these basis,the research hypothesizes is put forward.The financial statement of the listed companies is the most important basis for the analysts to predict,and the quality of accounting information directly affects the accuracy of earnings per share forecast.Based on the theoretical derivation,the first hypothesis is put forward.The quality of accounting information is positively correlated with the accuracy of analysts’ earnings forecast.When the quality of annual accounting information is high,it will reduce the utilization of forecast basis that comes from other resources,which will make the analyst’s earnings forecast differences smaller.The second hypothesis is put forward that quality of accounting information is negatively correlated with analysts’ earnings forecast divergence.Reputation is the embodiment of the audit quality.The auditor with high reputation can provide high quality audit service,improve earning quality and make quality of accounting information more real and complete.Earning forecast based on financial statement audited by high reputation auditor is more accurate.Based on the theoretical derivation,the third hypothesis is put forward.High reputation of auditor can promote the positive correlation between the quality of accounting information and accuracy of analysts’earnings forecast.The listed companies choose the high reputation auditor,which is a kind of confidence that the company’s financial statement is true and completely reliable.The financial statement audited by high reputation auditor is more easily accepted by the market.Analysts accept this signal,so that they use the financial statement more as the basis of earning forecast.The fourth hypothesis is put forward that high reputation of auditor can promote the negative correlation between the quality of accounting information and the divergence of analysts’ earnings forecast.In this paper,there are a total of 5147 non-ST non-financial non-insurance A share companies in Shanghai and Shenzhen Exchange between year 2013 to year 2015,which is usedfor descriptive statistics and regression analysis.The main research method is empirical research.Through the rigorous empirical study,this paper comes to the conclusions that there is reliability.The quality of accounting information is positively correlated with the accuracy of analysts’ earnings forecast.The quality of accounting information is negatively correlated with analysts’ earnings forecast divergence.High reputation of auditor can promote the positive correlation between the quality of accounting information and accuracy of analysts’ earnings forecast.High reputation of auditor can promote the negative correlation between the quality of accounting information and the divergence of analysts’ earnings forecast.