Document Type

Article

Publication Date

2009

Publication Title

Financial Analysts Journal

Volume

65

Issue

6

First Page

52

Last Page

64

Keywords

Experiment/theoretical treatment, 9180:International, Accounting policies & procedures, Board of directors, Business And Economics--Banking And Finance

Abstract

This study examines whether investor protection affects the governance role of analysts in constraining earnings management. Using a sample of 50,966 company-year observations from 24 countries for 1990-2007, the study finds that earnings management is more negatively associated with analyst coverage in weak investor protection countries than in strong investor protection countries. The findings suggest that analyst coverage plays a more important governance role in countries where investor protection is weak (i.e., a substitute relationship exists between analyst coverage and investor protection). [PUBLICATION ABSTRACT]

Comments

The article available for download is a pre-print. The definitive version is published in the Financial Analysts Journal. It can be found here. Copyright (2012) CFA Institute.

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