Audit quality and properties of analyst earnings forecasts

被引:371
作者
Behn, Bruce K. [1 ]
Choi, Jong-Hag [2 ]
Kang, Tony [3 ]
机构
[1] Univ Tennessee, Knoxville, TN 37996 USA
[2] Seoul Natl Univ, Seoul 151, South Korea
[3] Florida Atlantic Univ, Boca Raton, FL 33431 USA
关键词
audit quality; analysts' forecasts; forecast accuracy and dispersion; industry specialization;
D O I
10.2308/accr.2008.83.2.327
中图分类号
F8 [财政、金融];
学科分类号
0202 ;
摘要
Under the assumption that audit quality relates positively to unobservable financial reporting quality, we investigate whether audit quality is associated with the predictability of accounting earnings by focusing on analyst earnings forecast properties. The evidence shows that analysts' earnings forecast accuracy is higher and the forecast dispersion is smaller for firms audited by a Big 5 auditor We further find that auditor industry specialization is associated with higher forecast accuracy and less forecast dispersion in the non-Big 5 auditor sample but not in the Big 5 auditor sample. Overall, our results suggest that high-quality audit provided by Big 5 auditors and industry specialist non-Big 5 auditors is associated with better forecasting performance by analysts.
引用
收藏
页码:327 / 349
页数:23
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