Analyst following, financial constraint, and audit opinion shopping: From the perspective of earning management

Abstract This study examines the relationships among analyst following, financial constraint, and audit opinion shopping from the perspective of earnings management, taking a sample of Chinese A‐share firms from 2008 to 2018. We find that analyst following alleviates firm's accrued earnings management activities which restrain opinion shopping behaviors; on the other hand, it prompts real earnings management activities that encourage firm's effort to audit opinion shopping. Earnings management has a mediation effect on the positive association between analyst following and audit opinion shopping. Corporate financial constraint amplifies the positive effect of analyst following on opinion shopping.