Analyst forecast properties, analyst following and governance disclosures: A global perspective

Yu, Minna

doi:10.1016/j.intaccaudtax.2009.12.001

Cited by 60 publications

(56 citation statements)

References 60 publications

(114 reference statements)

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“…Empirically, Yu (2009) shows that analyst following increases with Standard & Poor's transparency and disclosure rankings of board structure disclosures, suggesting analysts utilize information from these disclosures. Lang and Lundholm (1996) and Healy et al (1999) show that analyst following is increasing in the quality of firm disclosures, including those in proxy statements where audit committee expertise is disclosed.…”

Section: Hypotheses Developmentmentioning

confidence: 98%

“…Consistent with theory, professional practice standards require analysts to incorporate information from governance disclosures in their decision making (CFA Institute 2005). Prior research demonstrates that analyst following increases with higher Standard & Poor's rankings of board structure disclosures (Yu 2009). In addition, surveys report that both buy-side and sell-side analysts consider weak corporate governance as one of the two highest indicators of intentional misreporting and over 75 percent of sell-side analysts report that corporate governance is a factor in their decision to cover a company (Brown et al 2014;Brown et al 2015).…”

Section: Introductionmentioning

confidence: 99%

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Audit Committee Accounting Expertise, Analyst Following, and Market Liquidity

Farber

Huang

Mauldin

2016

Journal of Accounting, Auditing & Finance

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Abstract:We study the relation between audit committee accounting expertise, analyst following, and market liquidity. Our main results indicate that analyst following increases subsequent to the appointment of an accounting expert to the audit committee. We also provide evidence that accrual quality, as opposed to audit quality or management earnings forecasts, is the channel through which accounting expertise increases analyst following and improves analyst forecast properties. We also show that audit committee accounting expertise is related to higher trading volume and lower liquidity risk, supporting incentives for greater analyst following. Our study extends prior literature by providing evidence that audit committee accounting expertise enhances firms' information environment beyond the effects it has on financial reporting quality or analysts' forecast properties. Our study also complements the literature on determinants of analyst following and market liquidity, both of which are related to cost of capital. Results from our study should be useful to firms seeking to enhance analyst following and market liquidity.

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Section: Hypotheses Developmentmentioning

confidence: 98%

Section: Introductionmentioning

confidence: 99%

Audit Committee Accounting Expertise, Analyst Following, and Market Liquidity

Farber

Huang

Mauldin

2016

Journal of Accounting, Auditing & Finance

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“…Following Bhushan (1989), subsequent empirical studies investigate the determinants of analyst coverage at both the country and firm levels. Multi-country studies examine the impact of different institutional environments on analyst coverage, such as investor protection, corporate governance (e.g., Baik et al, 2010;Boubakri & Bouslimi, 2010;Bushman, Piotroski, & Smith, 2004;Lang, Lins, & Miller, 2004;Yu, 2010), and the effect of varying accounting standards for cross-listed stocks (e.g., Abdallah, Abdallah, & Ismail, 2012;Chen, Weiss, & Zheng, 2007). In firm-level studies, scholars examine the impact of different company characteristics and corporate governance issues on analyst following (e.g., Baik et al, 2010;Barth, Kasznik, & McNichols, 2001;Bhushan, 1989;Brennan & Hughes, 1991;Eng, Nabar, & Mian, 2008;Jiraporn, Chintrakarn, & Kim, 2012;Jiraporn, Liu, & Kim, 2014;Lang & Lundholm, 1996;Lehavy, Li, & Merkley, 2011;Marston, 1997;Rajan & Servaes, 1997;Sabherwal & Smith, 2008).…”

Section: Introductionmentioning

confidence: 99%

Analyst Coverage: Does the Listing Location Really Matter?

Hassan

Skinner

2015

SSRN Journal

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Using a count panel regression method, we find that the listing location really does matter as stocks listed on the main board (FTSE350) rather than the junior market (AIM) attract more analyst coverage than can be explained by existing factors, even when we control for listing requirements and the type of cross-listing. We also find that listing requirements have a significantly greater impact on the number of analysts following AIM companies rather than their FTSE350 counterparts. Moreover, pooling stocks from different listing locations can conceal additional differences in the determinates of analyst services for the main board and junior markets. For example, cross-listing on a stock exchange increases analysts coverage for FTSE350 stocks but not AIM stocks and listing on less transparent trading venues such as over the counter and alternative trading systems (dark pools) decreases analyst coverage, especially for AIM stocks.

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“…In emerging markets with infant institutions, business groups might compansate for the lack of external governance (Khanna& Palepu, 2000) [5]. Also, Financial analysts are important and influential users of financial reports and a major group of information intermediaries (Yu, 2010) [6].…”

Section: Literature Reviewmentioning

confidence: 99%

“…According to Yu (2010) [6], as a role of information intermediaries, the analysts are in the situation that, the more corporate governance disclosures, the more information is available for analysts and therefore make their forecast more valuable to investors, following by a larger demand and need in analyst serves.On the contrary, if analysts function as information providers, the more governance disclosures to investors, the less analyst services are demanded. Based on those two perspectives I mentioned above, the first hypothesis is non-directional:…”

Section: Hypothesis Developmentmentioning

confidence: 99%

Research on the Relationship between Corporate Governance and Information Environment in China

Han¹,

Wang²

2017

dtssehs

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Abstract. Relationship between corporate governance and information environment was explored by this paper, by using the samples of Chinese firms from Shanghai Stock Exchange over the period of 2004-2014. Three indicators have been used to proxy the information environment, which were: analyst following, analyst forecast accuracy, analyst forecast dispersion. Ultimately, the result of this investigation suggests that the better corporate governance result in the larger analyst following and greater forecast accuracy. The better governed firms tend to be associated with the lower forecast dispersion.

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Analyst forecast properties, analyst following and governance disclosures: A global perspective

Cited by 60 publications

References 60 publications

Audit Committee Accounting Expertise, Analyst Following, and Market Liquidity

Audit Committee Accounting Expertise, Analyst Following, and Market Liquidity

Analyst Coverage: Does the Listing Location Really Matter?

Research on the Relationship between Corporate Governance and Information Environment in China

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