TITLE:
The Monitoring Role of Financial Analysts: An International Evidence
AUTHORS:
Ahmed Marhfor, Rachid Ghilal, Bouchra M’Zali
KEYWORDS:
Analyst Coverage, Accounting Conservatism, Corporate Governance, Earnings Recognition
JOURNAL NAME:
American Journal of Industrial and Business Management,
Vol.5 No.5,
May
15,
2015
ABSTRACT: This study investigates whether high analyst coverage improves the quality of reported accounting numbers. Using conservatism in financial reporting as a proxy for the quality of reported earnings, we find evidence that analysts’ activities are not positively associated with accounting conservatism. The findings indicate that firms choose less conservative accounting methods when they are covered by more analysts. They are consistent with the notion that analysts’ activities do not substitute for other corporate governance mechanisms.