The Geographical Proximity Of Large Customers And The Accounting Information Quality

High-quality accounting information can not only directly reflect the real business results and financial status of the enterprise at this stage but also help reveal the future development trend of the enterprise.Therefore,accounting information has also become an important basis for various market transaction subjects to judge the intrinsic value of the enterprise,formulate corresponding trading plans,and realize resources rationally.But at the same time,it has also become the object to be distorted and manipulated by the enterprise to implement opportunistic behavior.Investigating influencing factors of accounting information quality and exploring ways to improve the accounting information quality has always been a core topic in the field of financial accounting research.Since the Industrial Revolution,socialized production and division of labor have significantly increased the level of human productivity and fundamentally changed the organizational form of human production.It is difficult for a single enterprise to cover the entire production process,and the supply chain system constructed by various specialized enterprises has become the basis for social production.In the context of current economic globalization,the stability and efficiency of the supply chain system not only affects the short-term business performance of enterprises but also relates to their long-term competitive advantage.The trends mentioned above have strengthened the relationship between large customers and supplier enterprises to share weal and woe.To maintain production order and improve the efficiency of the supply chain system,large customers urgently need to grasp the real business and financial status of enterprises,making expected supply chain investment decisions and monitor and curb the possible opportunistic behavior of enterprises.A great amount of management practice demonstrates that large customers have a strong motivation to monitor enterprises to improve their accounting information quality.However,the conclusions of the existing researches on the large customers and the accounting information quality are inconsistent.Some researches find that the reliance of large customers on accounting information will stimulate the enterprises' tendency to manipulate information,that is,monitoring from large customers is not always effective.The main reason is that existing researches mostly focus on the characteristics of the individual economic scale of customers,such as the number of customers or the proportion of sales revenue provided by large customers,and simply attribute the monitoring ability of large customers to their significant position in the realization of the enterprises' market share or expected revenue,which makes it difficult to investigate the potential impact of monitoring cost.The new economic geography theory provides a new perspective to solve these problems.A large number of researchers have found that geographic distance is an important factor that affects the monitoring cost and governance efficiency of economic entities.Based on the geographical location characteristics of large customers,employing geographical proximity to characterize the monitoring costs of large customers and analyze its impact on the accounting information quality would help resolve the disputes in the current research on the relationship between the characteristics of large customers and the accounting information quality.Considering this,this paper first adopts the normative analysis method,combined with stakeholder theory,corporate governance theory,transaction cost theory,and new economic geography theory,analyzes the impact of geographical proximity of large customers on the accounting information quality,and constructs the internal logic of geographical proximity-monitoring cost-accounting information quality.Subsequently,taking the A-share listed companies in China from 2009 to 2017 as the object,this paper empirically tests the relationship between large customers and accounting information quality according to the following steps:Firstly,this paper sorts out and analyzes the geographical proximity of large customers.While expounding the process of acquiring and constructing the geographical proximity index of large customers,this paper reports on the distribution characteristics of the large customer concentration as well as the geographic distance between large customers and enterprises,which aims to clarify the realistic basis for employing geographical proximity to measure the monitor cost of large customers.Secondly,this paper investigates the relationship between the geographical proximity of large customers and accounting information reliability.Combined with the geographical proximity index of large customers constructed above,this paper adopts the absolute value of manipulative accruals and real activity earnings management to measure accounting information reliability and establishes an OLS model for regression analysis.The research results show that the geographical proximity of large customers helps improve accounting information reliability.After analyzing the mechanism from two aspects of large customer monitoring motivation and corporate governance level,it is found that when an enterprise is more likely to fall into a business crisis or produce financial misstatements,the demand for the accounting information reliability of large customers is stronger,and the positive impact of geographical proximity of large customers on accounting information reliability is more pronounced.When corporate governance is poor,geographical proximity has a stronger effect on improving large customer monitoring capabilities,and the geographical proximity of large customers has a more pronounced positive impact on corporate accounting reliability.Thirdly,this paper investigates the relationship between the geographical proximity of large customers and accounting information relevance.Combined with the geographical proximity index of large customers constructed above,this paper constructs the earnings response coefficient model for regression analysis.The research results show that the geographical proximity of large customers helps improve accounting information relevance.After analyzing the mechanism from two aspects of large customer monitoring motivation and corporate governance level,it is found that when an enterprise is more mature and the development prospects are clearer,the demand for accounting information relevance of large customers is stronger,and the positive impact of geographical proximity of large customers on accounting information relevance is more pronounced.When corporate governance is poor,geographical proximity has a stronger effect on improving large customer monitoring capabilities,and the geographical proximity of large customers has a more pronounced positive impact on accounting information relevance.Fourthly,this paper investigates the relationship between the geographical proximity of large customers and accounting information conservatism.Combined with the geographical proximity index of large customers constructed above,this paper employs the Cscore index calculated by the improved Basu model to measure accounting information conservatism and establish an OLS model for regression analysis.The research results show that the geographical proximity of large customers helps improve the accounting information conservatism.After analyzing the mechanism from two aspects of large customer monitoring motivation and corporate governance level,it is found that when the enterprise belongs to the durable goods industry or devotes more specialized assets,the large customers are more sensitive to the negative enterprise news and their demand for accounting information conservatism also grows stronger.At this point,the positive impact of geographical proximity of large customers on accounting information conservatism would be more pronounced.When corporate governance is poor,geographical proximity has a stronger effect on improving large customer monitoring capabilities,and the geographical proximity of large customers has a more pronounced positive impact on accounting information conservatism.In terms of theoretical contribution,this paper not only provides observation perspectives and measurement indicators for relevant research on customer characteristics from the geographic spatial location level,and completes relevant research on accounting information influencing factors from the perspective of the product-market entity,and at the same time incorporates large customers into the subject of geographical proximity research,expanding the research scope of new economic geography in the field of financial accounting.In terms of guiding practice,this article also shows positive significance.For investors,when making investment decisions,they should fully consider the geographic and spatial location characteristics of large customers,and take advantage of the positive role of large customers close to the enterprise in improving the accounting information quality and promote decision-making efficiency.For enterprise managers,they should rationally use their negotiation advantages to monitor and improve the quality of information disclosure of suppliers based on the geographical location characteristics of the supply chain,and promote the overall efficiency of the supply chain.For regulators,they should format targeted regulatory strategies based on the geographic location characteristics of large customers to improve the market information environment.