The effect of analyst coverage on the quality of the financial report and stock price crash risk In Egyptian companies

This research aims to study the effect of financial analyst coverage on the quality of financial reports and the risks of the stock price collapse in the Egyptian stock market. The study relied on a multiple linear regression model in studying the effect of financial analysts' coverage on each of (accounting conservatism - earnings management - information asymmetry) as proxy variables for the quality of the financial report, the effect of analysts coverage on the risks of stock market collapse, and the interactive effect of analyst coverage and the quality of the financial report on the risks of thestock price collapse. For a sample of 54 companies listed in the Egyptian stock market from 2014 to 2019, with a total of 324 observations.
Based on this, the study supports the effectiveness of the supervisory role of the financial analyst through the use of financial analysts' experiences in examining the appropriateness of financial reports, as well as examining management behavior and helping investors discover opportunistic behavior. Which is reflected on the quality of the financial report and reducing the risk of stock price collapse. The study also supports the active role of financial analysts as information brokers in a way that increases the transparency of the company's information and reduces the risk of collapse.
The results of this study are of interest to investors who seek analyst reports to make their investment decisions and for information providers who demand external financing. The results of this study also have some other important implications for market participants, as market participants can use the coverage of financial analysts in exante assessing future stock price crash risk.
This study provides support for the view that financial analysts play positive roles as intermediaries and information monitors in the Egyptian stock market. Which provides additional evidence to explain the role of financial analysts in improving the quality of the financial report and reducing the risks of stock price collapse.