The Study On The Affection Of Analysts’ Cash Flow Forecasts To Earnings Management Of Listed Companies

Listed companies generally handle the surplus, damages the interests of investors. How to strict the earnings management of listed companies has become the attention of academics, scholars mainly research on the relationship between the internal governance and earnings management. With the development of the securities market, the analysts’ role becomes more and more important, they not only relieve the information asymmetry between investors and listed company, also play a role of external supervision. This article analyzes the impact of analysts’ cash flow forecasts on the earnings management from the perspective of external governance, hopes to enrich the study aimed at the influence of earnings management.Firstly, this article reviews the research about the effect of analysts’ forecasts on earnings management and relevant theory, then puts forward hypothesis and constructs empirical model. Secondly, with A-share listed company from 2006 to 2014 financial data and analysts forecasts data as the research sample, this article uses the modified Jones model to calculate the degree of earnings management, employs multiple regression method to examine the relationship between analysts’ cash flow forecasts and earnings management, then gets the following conclusion: analysts’ cash flow forecasts can effectively restrain the surplus manipulation of listed company, and the restraint of positive earnings management behavior is more significant; the good professional reputation of analysts enhances the restraint. Finally, in order to promote analysts developing supervisory function, constrain management behavior of listed company, and protect the interests of investors, this article proposes relevant policies and suggestions according to the research conclusion.