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How does governmental accounting and financial supervision affect the quality of analysts’ forecasts?

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  • Liu, Guangqiang
  • Zhang, Yifan
  • Liu, Chun

Abstract

This study investigates whether Chinese governmental accounting and financial supervision activities affect the quality of analysts’ earnings forecasts. The findings reveal that such supervision enhances analysts’ earnings forecast quality for governed enterprises. Mechanism tests indicate that supervision improves forecast quality by increasing firms’ information disclosure quality. Heterogeneity analysis shows that the effect of accounting and financial supervision on analysts’ earnings forecast quality is more pronounced in samples with faster marketization processes and lower institutional ownership ratios.

Suggested Citation

  • Liu, Guangqiang & Zhang, Yifan & Liu, Chun, 2025. "How does governmental accounting and financial supervision affect the quality of analysts’ forecasts?," Finance Research Letters, Elsevier, vol. 85(PB).
    • Handle: RePEc:eee:finlet:v:85:y:2025:i:pb:s1544612325011845
    DOI: 10.1016/j.frl.2025.107926
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    Keywords

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    JEL classification:

    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting
    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • L21 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Business Objectives of the Firm

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