How do Analysts' Cash Flow Forecasts Influence Accrual Mispricing

Abstract

Abstract:

Based on the companies listed in Shenzhen Stock Exchange during the period from 2007 to 2015, this paper explores the causal effect of analysts' cash flow forecasts on accrual mispricing. The empirical evidence indicates that earnings and cash flow forecast firms have less accrual mispricing compared to earnings forecast firms; analyst cash flow forecasts compete with the quality of accounting disclosure; the coverage of local analysts facilitates the cash flow forecasts' mitigation effect towards accrual mispricing. These findings suggest that the analysts' cash flow forecasts primarily alleviate accruals mispricing through monitoring effects.

Key words: analysts, analysts' cash flow forecasts, monitoring, accrual mispricing

Luo Le, Li Chaofan, Wang Shengnian. How do Analysts' Cash Flow Forecasts Influence Accrual Mispricing[J]. , 2018, 30(1): 154-165.

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