Influence Of The Securities Analysts' Reputation On The Earnings Management

As an important infomediary of the securities market,securities analysts released research reports that can reduce the information asymmetry between the investors and enterprises and have supervisory effects on management.And it will indirectly affect the way and degree of earnings management.However,China's securities market is constantly improving,and the space to use traditional accrual management is getting smaller and smaller,so some enterprises are switching it to more hidden real earnings management.As an important supervisory force in capital market,analysts pay attention to the influence of earnings management behavior.And more importantly,as a comprehensive reflection of the analyst's professional competence,the reputation of analysts and their changes can influence the earnings management behavior of enterprises.Therefore,this paper tests whether the reputation of analysts and their changes can have different impact on the management pattern.The goal of the article is to improve understanding of analysts reputation mechanism,and to provide the reference for the decision of investors and regulators.This article is based on reputation theory,principal-agent theory,effective market theory,asymmetric information theory and the reality of China.The reputation mechanism has the potential to restrain accrual-based earnings management and promote real earnings management.After using the data of the China's A-share market during 2010 to 2016 as sample,this article tests the analysts' concern,analysts' reputation and the changes of analysts' reputation's impact on enterprises' earnings management.The results show that the analysts' concern can play a role of external supervision,and then effectively inhibit the accrued earnings management of the enterprise.And the reputation of analysts can more effectively inhibit the enterprise's accrual-based earnings management behavior.But it will encourage companies to use more hidden real earnings management.Similar to the analyst's reputation,the change of analysts' reputation is negatively correlated with the accrued earnings management,and positively correlated with the real earnings management.At the same time,it will promote the implicit rationalization of earnings management.Finally,in order to improve the efficiency of capital market information and the system of securities analyst construction,this paper puts forward recommendation from three levels: the capital market,the securities analyst,the individual investor.The first measure is improve the quality of information in the capital market.And the other recommendations are improve the system of securities analysts and the professional ability of individual investors.Through these measures,we can provide a reference for controlling the earnings management behavior of enterprises and improving the effectiveness of securities market.