The Research On Corporate Governance And Accounting Conservatism

Modern corporate governance structure was considered as the implementation of accounting standards which is an important part of the mechanism, this has a significant influence on the quality of accounting information, and accounting conservatism is an important component of the quality of accounting information, theoretically speaking,the goal of corporate governance and the provision of high quality accounting information is inherently logical consistency. Previous studies focused on individual corporate governance factors to the accounting conservatism and the relationship between system and accounting conservatism,had not combined with system and corporate governance which had influenced on accounting conservatism,Therefore, This article attempts to inspect the relationships between corporate governance and accounting conservatism in the share reform and under the new accounting standards implementation system background. This have the important meaning to regulators, accounting standard-setter in the accounting information to understand the importance of capital markets, as well as understand the interaction between accounting information and the regulatory environment, and strive to foster the supply of and demand for high-quality accounting information to improve the market mechanism and corporate governance mechanism.This article selected from 2003 to 2007 in Shenzhen and Shanghai Stock Exchange 5182 A-share companies as a sample, at fisrt used the Basu (1997)'s surplus of reverse regression model, respectively, the introduction of corporate governance variables and the cross-variable selected corporate governance variables, including ownership structure, board characteristics, board of supervisors pay mechanisms and characteristics of four parts, the first test of a single corporate governance variables on the accounting conservatism, followed by the main corporate governance variables using principal component method to calculate a composite indicator which reflect the strong and weak corporate governance structure, and then introduce surplus regression model, followed by control factors such as characteristics of the company to do further analysis, and then study the reform policies and the promulgation of new guidelines on corporate governance with accounting conservatism. Finally, we do a test about sensitivity by the amended accrual model.The main conclusions are:1. Single-variable analysis, the accounting conservatism of the state-owned company is lower than the non-state-owned company,The ratio of the largest shareholding and concentration of ownership are negatively correlated with accounting conservatism, the same is degree of equity balances. There is no significant difference between one two-level and the separation on the accounting conservatism. The size of the board of directors and accounting conservatism are negative relations. The number of the annual meeting of the board of directors and accounting conservatism are positive correlation.The proportion of independent director the remuneration of the top three executives,the executives share and the remuneration of the top three directors are negatively correlated with accounting conservatism.The numbers held by board of supervisions is positive correlation with accounting conservatism. The relationship between the size of the board and accounting conservatism has not been verified. From the corporate governance structure and accounting conservatism evidence of a single variable test results, the vast majority of corporate governance has negative correlation with accounting conservatism.2.Composite index of corporate governance and accounting conservatism test results showed that composite index of corporate governance and accounting conservatism has negative correlation, high index of corporate governance on behalf of the weak corporate governance structure, and low composite index of corporate governance on behalf of strong corporate governance structure, The results show that the strong corporate governance structure will help improve the accounting conservatism.and weak corporate governance structure is to reduce the accounting conservatism.When control of the company's other characteristics, the conclusions remain valid. Further on the corporate governance changes in the sub-index is greater than 0 and less than 0 were, respectively, in t-1 period and the period t regression, the test results show that with the improvement of corporate governance, also to improve accounting conservatism. Background and guidelines from the system Control the two discussed the test showed that non-state-controlled listed companies is higher than accounting conservatism.of state-owned company, with the completion of the reform, non-state-owned company of the number of sound corporate governance and accounting conservatism's relationship will also improve.2006 before and after the promulgation of new accounting standards comparison and found that after the promulgation of guidelines for the accounting conservatism than before the promulgation of guidelines, but the promulgation of new guidelines impact on the relationship between on corporate governance and accounting conservatism is not clear.In this paper, innovation is in a special system in the context of a comprehensive study of corporate governance and the accounting conservatism relationship and through building a composite index, definite strong and weak corporate governance structure, and study of corporate governance index in the system and influence on the accounting conservatism. Come to the conclusion of the criteria listed on the formulation and improvement of corporate governance structure have important theoretical and practical significance.