Create a 16 page essay paper that discusses Role of financial analysts in banking.
Many recent financial reporting scandals (e.g. the Enron Scandal) have been attributed to poor corporate governance oversight, understatement of the role of financial analyst and poor financial reporting process (Weintrop, Li &. Byard 2006). As a response to these financial reporting scandals, regulators and major stock exchanges have implemented new rules designed to improve the quality of corporate governance,
strengthen the role of financial analyst (e.g., by requiring audit committees to be fully independent, role of financial analyst to include both financial and non financial information). Implicit in these regulatory changes is a belief that such measures will eventually improve the quality of information available to the users of financial reports (e.g., financial analysts) (Baker 1988, Covrig &. Low 2005, Weintrop, Li &. Byard).
Baker (1988) studies the important role of sell-side financial analysts on capital markets and by means of his analysis earnings forecasts and recommendations, financial analysts have a significant influence on the investment community (Lybaert &. ORens 2007). Lybaert &. ORens (2007) study how the use of non-financial information influences financial analyst forecast.