Earnings Management,Expectation Management And Sign Of Earnings Surprise

With the development of the securities analysts in china,the earnings forecasts of securities analysts play an important role in deciding the management decisions of listed companies and the stock price volatility.On the one hand,when making investment decisions,the investors would take earnings forecasts as an important reference factors,and if listed companies couldn't meet or exceed the earnings forecasts of securities analysts,the share price may fall.On the other hand,the management may adopt the way of earnings management or expectation management to meet or exceed the earnings forecasts of securities analysts in order to avoid the share price falling risk.The article focuses on the problem whether the earnings management and expectation management may affect the quality of sign of earnings surprise or not.Based on the earnings report of Shanghai and Shenzhen Security Exchange's listed companies from 2008 to 2016,the article empirical examines the relationship of the earnings management and expectation management with the quality of sign of earnings surprise use the method of event study and multivariate logistic regression.The main conclusion is:(1)during the study.period,positive earnings surprise accounted for more than 50%,and the proportion increases with time.(2)42.04%of the total sample performance new sign of earnings surprise,which means the share price reaction to positive earnings surprise is negative while the share price reaction to negative earnings surprise is negative positive.And the probability of the new sign of earnings surprise decreases as earnings surprise decreases in absolute value.(3)In positive earnings surprise group,the earnings management and expectation management is positively related to the appearance probability of the new sign of earnings surprise.In negative earnings surprise group,the earnings management is positively related to the appearance probability of the new sign of earnings surprise,while the expectation management doesn't affect the appearance probability of the new sign of earnings surprise.(4)Using multivariate logistic regression method,we find that the theory of new sign of earnings surprise has good prediction ability for the stock prices trend after earnings announcement and the accuracy reach 75%.According to the research conclusion,we put forward some policy suggestions.