Research On The Impact Of Agency Cost On The Quality Of Performance Forecast

Performance forecasting is a predictive disclosure of corporate earnings.Its quality directly affects the decision-making behavior of shareholders and other external stakeholders.High quality performance forecast disclosures are helpful in increasing information transparency and effectively improving decision-making on financial information.However,due to the uncertainty of the performance forecast and the immature development of China's performance forecast system,the gap between the performance of the listed company's performance forecast and the actual performance is large,the quality of information disclosure is worrying,and even the disclosure of corporate executives' performance forecast information disclosure Seek their own interests and other illegal acts.Many studies have shown that if enterprises have higher agency costs and the degree of information asymmetry increases,the conflict of interest between the agents and the entrusted parties may lead to the insider manipulation of the management.Then,will the increase in agency costs increase the self-interest in performance disclosure,thereby reducing the quality of performance forecasts?This paper takes this problem as the starting point to analyze and consider the influence of agency cost on the quality of performance forecast,which has important theoretical and practical significance.This paper reviews the changes and influences of China's performance prediction system since 2006 based on the actual situation of China's listed companies'performance prediction disclosure.On the basis of the combing domestic and foreign research literature and theoretical analysis,it empirically tests the influence of agency cost on the quality of performance prediction of a-share listed companies from 2006 to 2017.There are five parts in this article.The first chapter is introduction,mainly introduces the background and significance of this research.This paper also reviews and comments on the related literatures such as the company's performance forecasting motives,performance forecasting disclosure results and agency cost research.Chapter two mainly defines the related concepts such as agency cost,performance prediction,internal control,etc.,and uses the deductive method to demonstrate the mechanism of this paper by using the principal-agent,the signal transmission and the information asymmetry theory.Third chapter is the theoretical analysis and study hypothesis.Firstly,it describes the development of China's performance forecast system and the status quo of the performance forecast of China's listed companies.Then it demonstrates the mechanism of agency cost on the quality of corporate performance forecast and puts forward the research hypothesis.A total of 10,447 valid samples from 2006 to 2017 were selected to construct the relevant model.Descriptive statistics,correlation analysis and regression analysis were used to empirically study the large sample data.The fifth chapter is the research conclusions and policy recommendations.The study found that:(1)the negative correlation between the agency cost and the performance forecast quality is significant.(2)In the case of the performance forecast as bad news,the negative effect of the agency cost on the quality of the performance forecast is more significant,that is,the bad news can lead to the agent.The negative impact of costs on the quality of performance forecasts.(3)The better the internal control of the enterprise,the more it will inhibit the negative effect of agency cost on the deviation of performance forecast.The main contributions of this paper are as follows:(1)This paper studies the factors affecting the quality of performance forecast from the perspective of agency cost,and considers the nature of different notice messages,and concludes that reducing the agency cost of enterprises is the way to improve the quality of predictive information,enriching the agency cost.Research literature on quality of performance forecasts.(2)This paper discusses the adjustment effect of internal control between agency cost and performance forecast quality.It is found that perfect internal control has obvious governance effect on agency problem,which can guarantee high-quality performance forecast disclosure.This paper also further develops for China.The securities market supervision system and the establishment of a transparent and open investment environment provide important empirical evidence.