Influence Of The Analyst’s Attention On The Real Earnings Management

The principal-agent problem in the corporate governance structure leads to the information asymmetry between management and investors,which gives the management a chance to make a profit management.Moreover,with the continuous improvement of the legal supervision system,the potential risks of using accruals to increase profits are increasing,and the company is more inclined to use the real earnings management which is a more subtle way.The analyst can reduce the information asymmetry.Therefore,it is the focus of the study that whether the analyst’s attention can curb the real earnings management behavior.Further,it is the innovation point of this paper to differentiate the analyst into different quality groups,and to study the different performance of the heterogeneous analysis when it comes to the go-vernance effectiveness.Based on the theoretical basis of information asymmetry,effective market and principal-agent,this paper chooses the data of A-share listed companies from 2011 to 2015,and examines the impact of analysts’ attention and different characteristics on the real earnings management of enterprises.The results of this paper show that securities analysts can play the role of external regulators and suppress the real earnings management;Further research found that underwriters’analysts faced a conflict of interest that would weaken their independence and thus reduce the analyst’s governance effect,so independent analysts in reducing the company’s real earnings management effect is more obvious;In addition,the analyst’s report contains the cash flow forecast,which means more information about the earnings composition of enterprises,to strengthen the degree of concern to listed companies,therefore,the real earnings management of listed companies Behavior produces a more pronounced inhibitory effect.This paper expands the research on the governance utility of analysts’ attention,and further studies the difference of governance function between analysts with different characteristics.From the perspective of analysts,this paper provides a theoretical basis for perfecting the construction of corporate governance mechanism in China.