Study Of Accounting Conservatism On The Efficiency Of Company Financing And Investment

In this thesis,based on the institutional environment in China,from the company's financing and investment activities of the angle,the paper studies the economic consequences of accounting conservatism.Accounting information plays its function to protect the interests of investors through the pricing mechanism and governance mechanism,accounting conservatism as an important feature of accounting information quality,also has the function of pricing and governance.The influence of accounting conservatism on the financing cost,is the embodiment of the pricing function;the influence of accounting conservatism on inefficient investment,is the embodiment of the governance function.This paper has also studies the different influence of accounting conservatism on the corporate financing and investing activities,at the different external institutional environments and corporate governance mechanism.Using Chinese non-financial listing corporate data,the study found:Firstly,in the debt market,the default signal sound accounting information through the debt contract timely express,can reduce the risk of creditors,creditors would therefore provide low loan interest rates to provide robust debtor enterprise accounting information,accounting conservatism reduces the enterprise debt financing cost,improve the efficiency of debt financing;The nature of state-owned property right weakens the relation between accounting conservatism and the cost of debt financing.Between the external governance environment and accounting conservatism,they show a complementary relationship,namely in the external governance environment developed area,negative correlation is stronger between accounting conservatism and corporate debt financing cost.And between corporate governance and accounting conservatism in the debt market show no alternative or complementary relationship obviously;audit supervision can enhance the correlation between accounting conservatism and corporate debt financing cost.Secondly,in the equity market,conservative accounting information can make the shareholders more timely understanding of company investment project risk,expected future cash flow of the degree of uncertainty is reduced,accordingly,to provide conservative financial report of the company,the shareholders will claim a lower risk premium,accounting conservatism decrease the cost of equity financing,improve the efficiency of equity financing.In state-owned property rights of the company,accounting conservatism and the cost of equity financing show a weak negative correlation.Between the external governance environment and accounting conservatism presents alternative relationship,namely in the poor external governance environment area,stronger negative correlation between the cost of equity financing and accounting conservatism;the different corporate governance mechanisms have different effects on the relationship between the cost of equity and accounting conservatism.Thirdly,in the question of the impact on corporate investment efficiency,adopting conservatism accounting policy can make management more timely give up less profitable projects,withdraw from loss project earlier,and the withdrawal of funds for the positive net present value of the investment earnings,restrain excessive company's investment behavior,improve the efficiency of investment,the study finds that accounting conservatism restrain company's overinvestment.At the same time,accounting conservatism by reducing the financing cost of the company,the company can carry out financing easier for itself with a positive net present value projects and ease underinvestment,improve investment efficiency.This paper also examines the effect of institutional environment on the relationship between accounting conservatism and the efficiency of investment.This thesis consists of 7 chapters in the structure arrangement:The first chapter is introduction.This chapter introduces the background and basis,research significance,research ideas and framework design,the structural arrangements of this paper.The second chapter is the theoretical basis and literature review.This chapter introduces the main theories used in this article in the theoretical analysis,and combing the literature on the accounting conservatism,pointed out that in recent years,accounting conservatism literature research trends and directions,and the opportunity to study accounting conservatism in current and future.The third chapter is the definition of related concepts of this article,as well as the index calculation of accounting conservatism,and tests the effectiveness of accounting conservatism index used in this paper.The fourth chapter combing China's institutional environment,theoretically analyzes and empirically researches on the relationship between accounting conservatism and the debt financing efficiency.The fifth chapter combing China's institutional environment,theoretically analyzes and empirically researches on the relationship between accounting conservatism and the equity financing efficiency.The sixth chapter combing China's institutional environment,theoretically analyzes and empirically researches on the relationship between accounting conservatism and investment efficiency(overinvestment and underinvestment).The seventh chapter is the conclusion of the study,suggestions,the innovation and research limitations.