Audit Supervision And Meeting Or Beating Analyst Expectations

With the development of the securities market and the growth of the stock analyst industry,analysts now have not only a complete data search channel,but also a professional financial analysis capability,which is uniquely advantageous compared with external investors with weak information.As a result,investors increasingly rely on analysts' earnings forecasts and even use them as criteria for judging the true performance of listed companies.In reality,reaching the analyst's forecast is not only the "darling" in the eyes of analysts,but also the "achievers" in the minds of investors.The stock price of the company that does not reach the analyst's forecast will even plummet overnight.Therefore,in order to avoid the negative surplus,management will make the report surplus just reach or slightly exceed the analyst's consensus forecast through earnings management.This behavior is called �catching the earnings forecast�.Because this behavior increases the business risk of the company,reduces the quality of financial statement information,increases the information asymmetry between investors and enterprises,and damages the rights and interests of investors.Therefore,in order to alleviate this situation,the market is high quality.The need for auditing is growing.It is true that auditing,as an important external monitoring mechanism,plays an irreplaceable role in discovering management financial fraud,improving the quality of financial statements,and reducing information asymmetry between investors and listed companies.Relevant guidelines also require auditors.Pay particular attention to management fraud pressures due to analysts' earnings expectations.Numerous studies have demonstrated that high-quality audits can curb the company's earnings management.Can high-quality audits effectively monitor management's use of earnings management to meet earnings forecasts? With the gradual establishment and improvement of China's internal control system,as an important means of internal supervision,the internal control system and external audit complement and cooperate with each other to jointly restrict the behavior of the listed company's management,then the internal control system is in the audit quality and management of listed companies.What role does the layer play in meeting the relationship of earnings forecasts?In order to clarify these problems,this paper takes the Shanghai and Shenzhen A-share listed companies as the research object,and proves the relationship between the audit supervision and the listed companies to meet the analyst's earnings forecast through empirical research,and introduces the internal control system as the adjustment variable.On the basis of this,further research is conducted to explore the differences in the impact of high-quality audit on the impact of listed companies on analysts' earnings forecasts under the conditions of external institutional environment and different internal property rights.Finally,this paper puts forward suggestions for relevant departments from several aspects such as improving audit quality,strengthening internal control,and improving external institutional environment construction.The main conclusions of this paper are:(1)High-quality audits can supervise and constrain management behavior,effectively suppressing the possibility of catering to analyst forecasts.Among them,the international �Big Four� accounting firms provides higher audit quality than the domestic �Top Ten� accounting firms,which can significantly inhibit the possibility of listed companies catering to analysts' earnings forecasts.(2)The well-controlled listed companies are less likely to meet analysts' forecasts;(3)internal control and external audit can replace each other,and a good internal control system weakens the audit's inhibition of listed companies' catering to analyst forecasts;(4)In areas with high marketization,audits have a more pronounced regulatory role in catering to analyst forecasts in areas with low marketization.(5)Compared with state-owned enterprises,audits have a more pronounced regulatory role in catering to analyst forecasts in non-state-owned enterprises.