Analyst Coverage And Earnings Management

In the current increasingly regulated securities market in China,the earnings management of listed companies has increasingly attracted the attention of regulators.Under the current social background that emphasizes prevention and control of financial risks,especially the latest implementation of March 1,2020 the Securities Law,the Securities Law has established a special chapter to stipulate the quality requirements for information disclosure of listed companies,emphasizing that information disclosure must be true and effective.Among them,earnings management is an important area for information disclosure of listed companies,and it is also one of the most concerned issues for securities market supervisors and investors.The impact of external monitoring mechanisms represented by securities analysts on the earnings management behavior of listed companies has also received increasing attention from the market.This article collected the financial data and 797,928 analyst reports of 74 non-financial listed companies in China from 2003 to 2018.The analyst attention database obtained by processing 797,928 analyst reports through machine learning,then reuse the robustness estimation method of clustering effect at the industry level and annual level(Cluster2),so the effects of the attention of securities analysts on the accrued earnings management behavior and real earnings management activities of listed companies in China's securities market are studied.The research results show that:(1)analysts' concerns about the incentives that can effectively curb listed companies' accrual earnings management behaviors,but they can promote and strengthen the implementation of real earnings management behaviors of listed companies;(2)with analysts' attention improving,the suppression effect of accrued earnings management behaviors of listed companies between securities markets and the promotion effect of their true earnings management activities are more obvious;(3)As analysts' focus on listing on securities markets is increasing,the suppression effect of the company's accrual earnings management behavior and the promotion effect of real earnings management activities have been strengthened.The conclusions of this paper help to objectively and comprehensively reveal the impact and role of analysts' concerns,and provide theoretical support and empirical analysis for securities analysts to perform better functions.