The Impact Of Internal Control Quality On Earnings Forecast Of Securities Analyst

China promulgated the laws and regulations about internal control that advocate the companies to establish internal control system and release internal control self assessment report in 2008. The problems of internal control not only become the object of enterprise managers and outside investors’ attention, but also have become the common focus of academic circles. But our country stock market started lately, the reimbursement is not mature enough, the information asymmetry problem has hindered the development of the capital market. And, the quality of the investors should be improved. So the securities analyst earnings forecast report became the majority of investors for investment decision-making reference information. It has been demonstrated that the internal control can affect analysts’ earnings forecasts, but directional influence has not formed a consistent conclusion. And the empirical research in this area is still relatively small; there is little literature from empirical study of prediction efficiency and prediction quality for empirical research. From this point, this paper researches the specific impact of internal control quality on analyst forecast efficiency and predictive quality. It can not only provide a new idea for analysts to predict the improvement of the environment that make the prediction results more close to the actual value of the enterprise, but also conducive to the analysts assume responsibility of market information of the bridge that promote capital market information to exchange. So it will improve the operation of the capital market efficiency.Based on the review and summary on the literature, this paper explore the influence of internal control quality to analysts’ earnings forecasts from two angles of prediction efficiency and the quality of forecast. And make the reasonable assumption the internal control has positive effect on the prediction efficiency and quality. Then by using the method of empirical test, selection Shanghai stock exchange and the Shenzhen Stock Exchange main board of listing Corporation as a sample from 2009 to 2013. In the model design, this paper uses the prediction of the number of number of reports, analysts tracking number, forecast update frequency and forecast project as a substitute variable prediction efficiency, and uses predictive accuracy and divergence as a substitute variable prediction quality, using the method of descriptive statistics, correlation analysis and regression analysis to verify the hypothesis of this paper. Finally, in order to increase persuasion, this paper tests the stability of the regression model.Firstly, the results show a significant positive correlation that the quality of internal control and the prediction efficiency. The quality of internal control is better, the prediction efficiency is higher. In other words, the higher the internal quality of the company, the more the number of analysts’ forecast report and the number of analysts tracking prediction, the update frequency is faster; Secondly, the results show a significant positive correlation with the quality of internal control and quality prediction. The higher the quality of the internal control, the efficiency is higher. That is to say the better internal control of the company, the higher the quality prediction deviation that analysts and the actual result of value will decrease, which will improve the prediction accuracy. According to the research results, puts forward the following suggestions: analysts should pay attention to the internal quality control of the listing Corporation, will be the quality of internal control as the important research content; the company should strengthen the internal control system, and by improving the internal control to improve the authenticity and integrity of the public disclosure of information; the government’s relevant departments should strengthen the construction of relevant laws and regulations the evaluation of internal control, detailed standards, enable the company to disclose the information more real, more reliable, and can accurately, timely delivery to the investors, improve the whole operation of the capital market efficiency.