A Study On Determinants Of Accounting Transparency Using Multinomial Logistic Model

A Study on determinants of Accounting Transparency Using Multinomial logistic modelIn recent years, the accounting transparency of listed companies has been concerned .China Securities Regulatory Commission and other regulatory authorities has been positived to promote to disclosure prompt and reliable information so that the company maintain a high degree of transparency of information. To individual companies, the high transparency can keep accounting information with symmetry and cause investors to have confidence in the enterprise.To investors, the investors can take advantage of the large amounts of information to make the right investment decisions. To society, the higher accounting transparency will lead to more efficient allocation of resources. However, the survey has founded the information disclosure of listed companies is deficient and accounting transparency is very incline.Much of the key information has not been properly disclosured. China scholars are at the initial stage in the study of accounting transparency.The research is still immature and the conclusion is also inconsistent. Therefore, this article selected 2191 samples in the Shenzhen Stock Exchange in order to analyze and research the relationship between the factors and accounting transparency.The article is based on agency theory and signal theory. Furthermore,it referred to the literature at home and at the abroad.We aimed to test the relation of accounting transparency and its affecting factors using logistic model. Although accounting transparency is divided into four categories , including failed = 1, pass = 2, good = 3, excellent = 4, the transparency of listed companies is average of 2.79.We think the accounting transparency of listed companies is still in the middle level.However,the unqualified and qualified listed companies is gradually reduced, and good and excellent listed companies is gradually increased from the years 2007 to2009.The tendency is indicating that accounting transparency of listed companies are gradually getting better with the Chinese regulatory system standardized and disclosure mechanisms perfected. Profitability and accounting transparency have a positive correlation. that is, the high profitability can improve accounting transparency. Firm size and accounting transparency has a positive correlation .that is, large companies can improve the accounting transparency. The proportion of independent directors and accounting transparency has a positive relationship.This indicated that the independent directors in listed companies should be able to play a regulatory role. If The proportion of independent directors is high, accounting transparency will be higher. The proportion of state-owned shares and accounting transparency have a positive relationship.This made clear that the listed companies had no pressure in financing so that they are more willing to disclose information to improve accounting transparency. Tunnelling and the accounting transparency had a negative correlation. Because with the tunneling is very deep, the controlling shareholder were long for occuping the minority shareholder's interests.Controlling shareholder is reluctant to disclose information to decrease of the accounting transparency.If the company was not audited by the non-Big Four, the accounting transparency is relatively low.However, If the company was audited by the non-Big Four, the accounting transparency is relatively high. Managerial ownership play the role of incenting manager so that they disclosure more information to make information more transparency.But this effect did not pass the significance test.We assumed that equity incentives can not really play the role of incentives. If chairman is act as general manager ,the corporation's regulatory actions will evolve into "they supervise theirselves behavior,". It will lead to the reduction of accounting transparency.