Financial Analyst Forecast And Earnings Empirical Research Management In The New Accounting Standards

Securities institutions, as market intermediaries, develop rapidly with the development of China’s securities market. The securities institutions release listed companies’forecast information. No one wants to do the trading loss, investors are no exception, and they want to buy the companies’ stocks to get dividends or interests brought by the price difference. These interests, however, is based on the companies’ future profitability; earnings forecast is financial analysts’prediction of the companies’ future profitability.Earnings management is managers’ behavior, which is selecting favorable accounting policies favorable or trading arrangements to smooth or change the external financial reports. By earnings management, managers can influence or mislead shareholders; managers can maximize their own interests. The more the earnings management there is, the lower quality of accounting information is.Financial analysts’earnings forecast is specific information for investment advice. Through their own judgments, professional analysts consider various factors about companies’ past, now and future, use statistical and mathematical methods to forecast companies’ income. The earnings forecast can help investors make a rational economic decision. So, the accuracy of financial analysts’earnings forecast is closely related to the extent of earnings management.By publishing the new Accounting Standards, China’s accounting policy changes a lot. The new standards cautiously adopts the fair value method, revises the specific criteria of debt restructuring, which have influences on earnings management as well as the analysts’forecast.This paper is focus on the relationship between the accuracy of financial analysts’ earnings forecasts and the extent of managers’earnings management behaviors. With the listed companies’earnings forecast data from2001to2011, we use empirical method to examine the hypothesis and get the conclusions that the accuracy of financial analysts’ earnings forecasts and the extent of managers’earnings management behaviors are negatively related before and after the publishing of the policy. This is due to managers modifies accounting information by managing earnings, reduces the quality of accounting information, and then financial analysts’forecasts based on accounting information and professional judgment cannot be accurate.There are six chapters. Chapter1is introduction, which states the basic research content, summarizes background and significance, describes research methods and research framework, and explicitly points out that the innovation of this paper. Chapter2is theory basis, which illustrates the theory basis of analysts’ forecasts and the influences of the new Accounting Standards. Chapter3is hypothesis, which presents questions, hypothesis and their basis. Chapter4is variable design and data collecting, which chooses the appropriate proxy variables for the accuracy of financial analysts’ earnings forecasts and the extent of managers’ earnings management behaviors. Chapter5is empirical test, which uses A-share listed companies’ data from2001to2011to test the two hypotheses and perform the sensitivity testing. Chapter6is conclusions and recommendations, which summarizes the paper, explains the limitations and gives corresponding recommendations.There are three innovations in this paper. First, we study the accuracy of outside financial analysts’earnings forecast, which is different from most exist research that are about inside companies’financial analysts’forecasts. Second, most of exist paper focus on the motive and method of earnings management in our country, our study about the relationship enrich the field. Third, due to the practicing of new Accounting Standards, the quality of listed companies’ financial reporting has been improved; we further explore the relationship between accuracy of financial analysts’earnings forecasts and the extent of managers’earnings management behaviors with the considering of the new Accounting Standards.