Compliance Culture And Analysts' Earnings Forecasts Accuracy

Securities analyst earnings forecast play an important role in improving the efficiency of information communication between listed companies and investors,the price fluctuations of securities market,investors decision-making and price for the lead role of the allocation of resources.But it is difficult to maintain the independence of the earnings forecast among securities companies and stakeholders.Compliance culture of the securities company level may also affect the securities analyst earnings forecast accuracy.The fraud triangle theory is that any irregularities are composed of pressure,opportunity and excuse.The conflicts of interest bring pressure to the earnings forecasts behaviour of securities analysts.The weak securities company internal compliance culture level,poor internal control environment and low levels of regulation provides conditions and opportunities for securities analyst publish inaccurate forecast Organizational identity theory that organizational members tend to be consistent with the organization in behavior and ideas.Organizational identity have an impact on influencing the employees to follow the behavior of the organization.embodied in the individual consciousness and behavior of "individualization".Compliance culture affect the employees' attitude and behavior to meet the requirements of the securities firm and stakeholders.Whether the securities companies' compliance culture will affect the earnings of the securities analysts' earnings forecasts? As an important stakeholder of the securities firm,the management of the listed company's motives on the basis of expectations management will intervene in the analyst's forecast.But analysts are likely to succumb to pressure from listed companies to adjust earnings forecasts based on the "ingratiation hypothesis".Whether the securities company's compliance culture level will affect securities analysts publishing more strategically biased forecasts? Based on the theory of reputation'constraintsof securities analyst earnings forecast behavior,Whether the reputation of the star analyst effect will weaken the securities company's compliance culture on its earnings forecast accuracy?This paper selects the data of chinese analysts' earnings forecasts during 2013~2015 as the samples.By using relative error prediction model to quantify the securities analyst earnings forecast accuracy,using the number of infractions,in violation of the regulations of the securities firm,the number of executives suspected violations,penalized amount,the classification of the securities company rating of five variables as the proxy variable of compliance culture,Analysing the influence factors of affect the securities analyst earnings forecast accuracy.This paper constructed test securities company compliance culture influence on securities analyst earnings forecast accuracy of regression model,and pearson and spearman correlation coefficient test,regression analysis and robustness test.we found that analysts employed by security companies with weaker compliance culture produce less accurate forecasts,more strategically biased forecasts and vice versa.the association between the ecurities company compliance culture and analysts' forecast accuracy is less positive for analysts with all-star Analyst.We suggest that security companies should establish integrity mechanism,improve compliance risk management and internal control specification standard;In addition to security companies,the regulatory authority should guide the analysts to strengthen industry self-discipline behavior and judicial administrative management.