The Impact Of Financial Comparability On The Analysts’ Earnings Forecast Behavior

Securities analyst in the capital markets is a bridge connecting between investors and listed companies. Analyst in the capital market is playing an increasingly important role. On the one hand, as users of information, securities analysts will collect and handle accounting information disclosed by listed companies. On the other hand, as providers of information, securities analysts will give the earnings forecast report,which provide investing opinion for investors.As the information proxy in the capital market,analysts have fasten the liquidity of information from listed companies to investors,thus improving the efficiency of capital market.Accounting information is a important source of analyst’ earnings forecast report, therefore the quality of accounting information has directly affected the quality of analysts’ earnings forest report,which will affect the decision of investors.Financial information comparability is a very important part of accounting information quality, which will improve the usefulness of accounting information. Therefore,the research between financial information comparability and analysts’ earnings forecast behavior will highly improve the information environment,and it will have a very important impact on capital allocation.First, we have studied the relation between financial information comparability and the earnings forecast behavior of analysts,and have a research into the related literature.Based on the literature we have studied, we develop our hypothesis. This paper is based on the sample of A-share listed companies over the 2004-2012 periods,using empirical method to test the impact of financial information comparability on analysts’ earnings forecast behavior.Besides,We also have tested the impact of interaction between financial information comparability and financial information reliability on analysts’ earnings forecast.After our empirical test,we make some conclusions.The conclusions are as follows:(1) Financial information comparability is positively correlated with analysts’ degree of attention, the higher financial information comparability of listed companies is, the more analysts will follow.(2) Financial information comparability is positively correlated with analysts’ earnings forecast accuracy. The higher financial information comparability of listed companies is, the higher analysts’ earnings forecast accuracy is.(3) Financial information comparability is negatively correlated with analysts’ earnings forecast accuracy. The higher financial information comparability of listed companies is, the lower analysts’ earnings forecast dispersion is.(4)Analysts’ earnings forecast behavior is also affected by financial information comparability.The interaction of financial information comparability and financial information reliability will weaken the impact of financial information comparability on analysts’ earnings forecast behavior.As discussed above, the guardian should improve the completeness of accounting norm and diminish the space of the choice of accounting policy,which will improve financial information comparability.The listed companies should strengthen the internal control construction as well as improve the completeness of the structure of corporate governance. As the supervisor of listed companies,analysts should improve their professional level,which will decrease the information asymmetry between the listed companies and investor and improve the allocation of capital market.