Audit Quality And Analyst Forecasts Based On The Perspective Of Analyst Forecasts At Different Time Points

By playing an important role as an information intermediary in the capital market,securities analysts can effectively alleviate the information asymmetry between investors and listed companies and make the capital market operate efficiently.The industry of China's securities analyst is also making progress with the development of the capital market.However,judging from the data of industry report from analysts in recent years,the accuracy of earnings forecasts makes people wonder whether the analyst has fulfilled the function of information agency.One of the important sources of information for analysts to make earnings forecasts is the financial reports issued by listed companies.Therefore,the quality of information disclosed by listed companies' financial reports will affect the accuracy of analyst forecasts.The financial report of a listed company must be audited by an accounting firm.Therefore,the quality of the audit services provided by the accounting firm will affect the quality of the information disclosed by the listed company,which in turn affects the accuracy of the analyst's forecast.Based on the above analysis,this paper study the relationship between audit quality and analyst's earnings forecast bias.Because the conclusions of the existing research on the impact of audit quality on the analyst's earnings forecast bias are not consistent,this paper innovatively proposes to study the impact of audit quality on analyst forecasts from the perspective of analysts at different time points.This paper uses a combination of qualitative and quantitative research methods.First of all,in the first part of the article,the relevant literatures of audit quality and analyst prediction are summarized.Then in the second part of the theoretical analysis,analyzing and summarizing the main concepts and related theories involved in the research.Based on the qualitative analysis of the first two parts,the third part of the research design,the fourth part of the empirical results analysis and the fifth part of the extended research mainly adopt the quantitative research method.The empirical study of this paper selects the China's A-share listed company from 2012 to 2017 as a sample,and divides it into a begin-of-year analyst forecast group and a end-of year analyst forecast group for empirical research.This paper considers endogeneity threat using the propensity score matching method(PSM).Then the robustness test was performed.The final part of this article is the conclusions and related policy recommendations.Through theoretical analysis and empirical research,this paper finds that the inconsistent conclusion of existing research on the impact of audit quality on analysts' predictions may be due to the data selection of analysts' forecast.The begin-of-year analyst forecast data is cleaner and more efficient compared with the end-of-year analyst forecast data.The quality of auditing is negatively correlated with the forecast bias of analysts at the beginning of the year,and the mechanism of “decision usefulness” is significant.The expansive study also found that the National Auditing Standards of the People's Republic of China,which came into force on January 1,2011,enhanced the inhibitory effect of audit quality on analyst forecast bias.