Empirical Study On Management Power,External Supervision And Deviation Of Earning Forecasts

With the rapid development of the world economy,China's securities market is also constantly building and developing.The focus of investors is no longer limited to historical information,and more emphasis is placed on predictive information in the future.Profit forecasting information is one of the future information.Many countries implement mandatory earnings forecasting information disclosure system,and listed companies will voluntarily disclose earnings forecasting information to meet the needs of investors and information users.The reliability of profit forecasting information is of utmost importance.Accurate and reliable profit forecasting information is an important basis for investors to make investment decisions,and reduces information asymmetry caused by agency problems.However,information quality problems are not uncommon.The company publishes biased profit forecasting information because of private interests or multiple influences.This will not only harm the interests of investors,but also not benefit the fair reflection of the company's value,the establishment of corporate brand image and the maintenance of the company's reputation.Therefore,the research on the quality of earnings forecast information disclosure is of great significance.Then what impact does management power have on the deviation of profit forecast information? When external supervision conditions change,what kind of difference will result?This article first sorts out relevant literature on management power,external supervision,and earnings forecast deviation,the present study focuses on the influence of managerial power and compensation design and performance fluctuation,few studies consider the relationship between the managerial power and earnings forecast deviation,starting from the angle of external supervision is less and less,these make this article find a breakthrough.Based on information asymmetry theory,principal-agent theory,signal theory and related theories,the hypothesis was put forward.Empirical data from A-share listed companies in Shanghai and Shenzhen stock markets from 2012 to 2016 was selected as a sample.Using descriptive statistics,correlation analysis,and multiple linear regression analysis to conduct empirical tests to form research conclusions,and correspondingly to analyze the actual situation in China,targeted and proposed constructive policy recommendations to improve the disclosure quality of China's earnings forecasting information.Through empirical research,it is found that under the same conditions,management power has a significant positive impact on profit forecasting bias.At the same time,external supervision has an inhibitory effect on profitability forecast deviations caused by management power.The stronger the external supervision,the weaker the influence of management power,and the external supervision will effectively weaken the profit forecast deviation caused by management power.Through further tests and stability tests,the reliability and stability of the conclusions are confirmed,and there is practical value in the effective supervision of management power,the strengthening of external supervision mechanisms,and the disclosure of laws and regulations related to the disclosure of profit forecasting information.The quality of China's earnings forecast information disclosure has been effectively improved.The research results of this paper have rich theoretical and practical significance.