Does an abnormal change in deferred tax assets interfere with analysts’ earnings forecasts?

In 2007, China adopted the single balance sheet liability method for tax accounting, but its shortcomings have emerged. I sample A-share listed companies from 2007 to 2018 to study whether an abnormal change in deferred tax assets interferes with analysts’ earnings forecasts and find that an abnormal change in deferred tax assets increases the error and divergence of these forecasts. Compared with a negative abnormal change in deferred tax assets, a positive abnormal change has a greater impact on earnings forecasts. Additionally, the level of corporate governance, audit quality and analysts’ professional ability have moderating effects on the correlation between an abnormal change in deferred tax assets and earnings forecasts. However, an abnormal change in deferred tax liabilities does not have a significant impact on that correlation.