Fair Value Hierarchy Information,Audit Quality And Analyst Forecasts

In order to meet the needs of economic development,in January 2014,the Ministry of Finance issued "Accounting Standards for Enterprises No.39-Fair Value Measurement"(The following is referred to as "Fair Value Measurement Standards")to regulate the measurement and disclosure of fair value and improve the quality of accounting information.The fair value measurement standard stipulates that the enterprise should divide the fair value measurement into three levels according to the different input values used,and make detailed regulations on the disclosure of the fair value information.Among the numerous users of financial reporting information,as one of the rational users,analysts have professional skills to analyze and interpret information,which can be more accurately judged and effectively predicted.By interpreting the information of all levels of fair value and judging its reliability and relevance,the analyst determines whether to track whether or not to use the information of all levels of fair value to predict earnings.The basic function of an independent audit is to reasonably ensure that the information disclosed by the company is true and fair.Can the fair value hierarchy information audited by accounting firms with high audit quality obtain the trust of analysts?Therefore,in the context of the promulgation and implementation of the fair value measurement standard,this paper discusses the relationship between analyst forecasts and fair value hierarchy information and whether the audit quality will affect the relationship between them.This article is divided into six parts and elaborates the relationship between fair value hierarchy information,audit quality and analyst forecasts.The first part is the introduction.This part mainly expounds the research background,significance and train of thought,as well as the innovation of this paper.The second part is the literature review.This part combs and comments on the relevant literature at home and abroad from three perspectives:fair value hierarchy information and accounting information quality,fair value hierarchy information and analyst forecast,the quality of audit and analyst forecasts.The third part is theoretical analysis and hypothesis.The theoretical includes effective market theory,signal transmission theory and information asymmetry theory.Through basic theoretical analysis,we find the relationship between fair value hierarchy information and analyst forecasts.On this basis,the adjustment effect of audit quality is studied by adding audit quality factors and comparative analysis.The fourth part is the research design.This part introduces sample selection and data sources,and defines variables and models.The fifth part is empirical analysis.After descriptive statistics and correlation analysis of sample data,empirical and robust tests are carried out to analyze the relationship between fair value hierarchy information and analyst forecast and the moderating effect of audit quality on the relationship between them.The sixth part,summary and countermeasure.This part draws the conclusion and puts forward some countermeasures and suggestions.At the same time,it points out the shortcomings of this paper and will be further studied in the future.In this paper,the analysts’ forecast efficiency is measured by two dimensions of analyst tracking and analyst forecast deviations.The theoretical analysis and empirical test were conducted on the relationship between the fair value hierarchy information and analyst forecasts and the role of audit quality in the relationship between the fair value hierarchy information and analyst forecasts.It is found that the disclosure of fair value hierarchy information can significantly attract analysts to follow up and reduce analysts’ forecast deviations.The disclosure of the first and second level information of fair value can reflect the value of assets or liabilities more truthfully and fairly,and can significantly attract analysts to follow up and reduce analysts’ forecast deviations.However,the third level of fair value information has no significant impact on analyst tracking and analysts’ forecast deviations,and its information quality needs to be improved.Audit quality plays a moderating role.High audit quality can significantly increase the positive correlation between the fair value hierarchy information and analyst forecast.High audit quality significantly enhances the negative correlation between the level of fair value information and analysts’ forecast deviations.The innovation of this article is mainly shown in the following two points:(1)the research perspective is new and unique.In the existing literature on fair value,there are few empirical studies on the fair value hierarchy information,mainly because the fair value measurement standards were promulgated in 2014.Before that,fewer companies disclosed the fair value hierarchy information and only by manually access the financial reports of listed companies to get relevant information.At present,most of the existing literature discuss the impact on analysts’ forecast from the perspective of information disclosure quality,and whether fair value hierarchy information will affect analysts’ forecast as part of accounting information.For this reason,this paper researches from the perspective of fair value hierarchy information.This paper researches the relationship between fair value hierarchy information and analyst forecasts,and the research perspective is new and unique.(2)The content of this article has a certain degree of innovation.From the perspective of fair value hierarchy information,this paper studies the impact of fair value hierarchy information on analyst forecasts and finds that fair value hierarchy information can attract analysts to track and reduce analysts’ forecast deviations.Specifically analyzing the relationship between fair value information at each level and analyst forecasts,it was found that the first and second level fair value hierarchy information can attract analysts to track down and reduce analysts’ forecast deviations.The third level of fair value information has no significant effect.At the same time,based on the relevant research of audit quality and analyst forecasts,this article uses audit quality as a regulatory variable to investigate whether the audit quality will affect the relationship between fair value hierarchy information and analyst forecasts.It was found that the quality of audits can enhance the relationship between fair value hierarchy information and analyst forecasts,which expands the research field of fair value hierarchy information and analyst forecasts.