Executive Change,Earnings Management,and Analyst Forecasts

With the gradual development and improvement of China's capital market,the basic analysis of the stock market is gradually mature,and the demand for high quality market information is also increasing.But analysts as the most important information bridge between listed companies and investors,by virtue of their professional knowledge,rich experience and quick access to information,to provide high quality forecast information to investors,thereby affecting the investment decisions of investors.Issued by the analyst earnings forecast can reduce the information asymmetry,is conducive to enhancing the value of the price reflects the transmission efficiency,so as to promote the capital market more effectively play the role of resource allocation,to ensure sustained and healthy development of the capital market.At the same time,analysts also market information users,it can provide more accurate prediction will conduct a comprehensive collection of information,the information usually includes public disclosure of corporate information and private information obtained directly from the management,the information will affect accuracy of analyst forecasts in some degree.The financial statements of listed companies as the most important information sources of public information and analysts' earnings forecasts,the quality of its information is closely related to the accuracy of analysts' forecasts.And executive change is the key factor affecting the quality of information.This article first reviewed the relevant literature on earnings management and executive turnover,analysts predict,and based on the effective capital market theory,principal-agent theory,asymmetric information theory and the usefulness of accounting information on the related research of falseTaking two listed companies in Shanghai and Shenzhen Stock Exchange as samples in 2006-2015,an empirical test by executives to change the effect of earnings management on analysts' forecasts,the empirical analysis consists of three parts,first examine the influence on executive change analyst forecast;earnings management is using the modified Jones model,verified by the earnings management influence executive changes analysts predict;finally it investigates the succession effect on analyst forecast.The results showed that: executive changes significantly reduced the accuracy of analyst forecasts,this is due to the earnings management behavior of executives reduced the quality of information of listed company's annual report,to increase the company's information risk objectively,the analyst forecast accuracy decline.And the source of the senior management of the company as a source of internal business compared to the source of the external business,analysts predict a significant increase in accuracy.The main contribution of this paper is:(1)most of the literature to the analyst as earnings management external supervision mechanism,from the perspective of quality of information,research of earnings management to predict the impacts on the accuracy of analysts,the conclusion of this paper provides new empirical evidence for understanding the performance impact factors of analyst forecasts.(2)most of the literatures have investigated the influence of private information on the analysts' forecast from the aspects of the field investigation and the geographical position.In this paper,from the perspective of succession,to explore the impact of private information supply on analysts' forecasts,and enrich the existing literature.