A Study Of The Impact Of Accounting Robustness On The Optimism Of Analysts’ Earnings Forecasts

With the development of China’s market economy over the past 30 years,the securities market has also reached a new stage of prosperity in recent years.However,behind the prosperity of China’s securities market there are still more small and medium-sized investors who have little access to information and weak processing ability.As small and medium-sized investors have difficulties in understanding the accounting and financial knowledge in the information disclosed by companies,they need professionals such as analysts with strong professional ability and experience in the field to play the ability of collecting and interpreting information to provide investors with profit forecast reports of listed companies and stock investment advice.Therefore,analysts,as the link and bridge of the securities market,connecting listed companies at one end and investors at the other,are becoming more and more important and influential in the market,and therefore investors in the securities market have higher requirements for the accuracy of analysts’ earnings forecasts.As one of the important principles of corporate accounting treatment,accounting robustness will have an important impact on accounting information,determining how good or bad the quality of accounting information is.At the same time,maintaining a high degree of accounting robustness can also alleviate to a certain extent the conflicts and contradictions of information asymmetry between different entities.The results of analysts’ earnings forecasts are affected by various factors such as access to information,their own professional competence and the quality of information disclosed by listed companies,and accounting robustness,as one of the important factors affecting the quality of information disclosed by listed companies,will have an important impact on the results of analysts’ earnings forecasts.Based on the above analysis,this paper selects a total of 25708 sample data of Chinese A-share listed companies from 2008 to 2021 to test the impact of accounting robustness on analysts’ earnings forecast optimism,using a fixed effects model with a one-period lag for accounting robustness,and finally concludes the following:(1)Accounting robustness has a suppressive effect on analysts’ earnings forecast optimism.(2)Accounting robustness has an enhancing effect on the information content of stock prices.(3)Accounting robustness can enhance the information content of share prices and thus inhibit analysts’ earnings optimism,in that accounting robustness inhibits share price synchronisation and thus inhibits analysts’ earnings optimism.The research contribution of this paper is in the following three areas.The first is to further extend the research area of analysts’ forecast optimism to accounting robustness.Previous studies by scholars have mostly been limited to the impact of accounting information quality on analysts’ earnings forecasts,and not much research has been done on accounting robustness,which is complementary to the previous studies.The second is to explain more clearly the paths through which accounting robustness affects analysts’ earnings forecasts with theoretical foundations and empirical results.Accounting robustness mainly exerts influence on analysts by reducing the degree of information asymmetry between listed companies and investors,improving the quality of corporate accounting information,coordinating the interests of principals and agents,reducing principal-agent costs,and increasing the information content of stock prices.The third is to explore the influence of stock price information content as the mechanism of action on the relationship between accounting robustness and analysts’ earnings forecast optimism,to enrich the research perspectives on analysts’ earnings forecast factors,and to expand the literature related to stock price information content on the one hand and analysts’ earnings forecast research results on the other.