Can analyst coverage constrain real earnings management?--A Literature Review

• 1、Business School, Hunan University, Changsha 410000

Abstract：Earnings management has always been a hot research topic. Compared to accrual earnings management, real earnings management is more likely to directly damage the company\'s future profitability and values, which is more hidden and makes firms deviate from normal operational activities. Prior literature document that analyst coverage will drive managers to reduce accrual earnings management and move to more real earnings management. The result is not exactly correct, due to the lack of strict research on detecting channel and blameless research design. They do not distinguish the supervision subjects among different supervision subjects, such as analysts, external auditors, laws and regulations. Therefore, this paper tries to sort out the existing relevant literature in this field, and puts forward some suggestions for the future research direction and methods.

Keywords： Accounting Analyst coverage Accrual earnings management Real earnings management Supervision mechanism