The Quality Of Internal Control And The Accuracy Of Analysts’ Earnings Forecast

With the continuous development and improvement of China’s capital market,analysts are regarded as the information disseminators of the capital market and play an important role in the capital market.The number of employees and teams is growing rapidly,and their role is becoming more and more important.On the one hand,analysts can effectively interpret the financial information of listed companies for investors;on the other hand,it is a bridge between enterprises and external investors.At the same time,as a tool of enterprise management,internal control can effectively promote enterprises to improve operating efficiency,enhance the credibility of financial reports,and ensure the compliance of relevant laws and regulations.Improving the quality of internal control has a great positive effect on enterprises,so will it also affect the accuracy of analysts’ earnings forecasts?Taking A-share listed companies from 2014 to 2019 as the research sample,this paper uses the "internal control index" published by Dibo company to analyze the impact of internal control quality on analysts’ earnings forecast accuracy and the specific mechanism path.The results show that:(1)the quality of internal control has a positive impact on the accuracy of analysts’ profit forecast;(2)the quality of internal control improves the accuracy of analysts’ profit forecast by improving the transparency of information;(3)for analysts who have done research,the level of internal control has a limited effect on improving analysts’ profit forecast.This paper improves the theoretical research on the impact of internal control quality on external information users,and reveals the mechanism path of the impact of internal control quality on analysts’ earnings forecast accuracy.In addition,this paper also discusses that the improvement of internal control quality leads to the improvement of analysts’ earnings forecast accuracy and the decline of stock price crash risk,and further emphasizes that strengthening the quality of internal control is conducive to the stable development of the capital market and the improvement of analysts’ earnings forecast accuracy.