Financial Analysts And Goodwill Impairment Management

Goodwill impairment management has a negative impact on the capital market,which bring more attention from the regulatory authorities.As a professional in the capital market,can financial analysts have governance effects on goodwill impairment management?Previous empirical results show that analysts can reduce earning management,but there is still no direct evidence whether they play governance role or pressure role in goodwill impairment management.Considering the importance of goodwill impairment management and the inadequacy of existing research,this paper analyzes how different analysts,such as star analysts and relation analysts,influence goodwill impairment management in different directions based on the theory of Fair Value,Structural Holes,Avoidance-Avoidance Conflict studies.Using the data of A-share listed companies from 2007 to 2020,the empirical results show that the more analysts follow,the lower goodwill impairment management,which is through disciplining the excess recording of goodwill impairment.We further analyze the roles of star analysts and relation analysts.It’s found that star analysts do not play an effective supervisory role,but relation analysts have a stronger supervision influence than general analysts.Moreover,the stopping following of relation analysts has a significant positive correlation with goodwill impairment,which also supports the governance role of relation analysts.The heterogeneity test shows that general analysts and relation analysts significantly reduce goodwill impairment management in non-state-owned enterprises and enterprises with high internal control.The conclusion provides direct evidence of analysts and goodwill impairment management,which reflects the governance of analysts following.This paper explores the roles of different types of analysts.It’s found that the relationship between analysts and managers is beneficial for analysts to gain information advantages and reduce goodwill impairment management.The results illustrate the information increment and decision usefulness of relation analysts’ reports.It’s convenient for investors to understand the current situation and goodwill risk of enterprises,and make decisions efficiently.