A Study Of The Relationship Between The Accounting Conservatism And Bank Loans

Since the early90s of last century China established the Shanghai Stock Exchange andShenzhen Stock Exchange. The rapid development of listed companies must need a lot offinancial supporting. Bank financing has always been an important source of external fundingfor corporations. The United States subprime crisis triggered a significant impact on theglobal economy, in the international financial crisis the risk awareness of domestic banksbecame more than ever, credit policy became more strict. It became a great significance forlisted companies to get more bank financing.Financial reports are widely used in bank debt contract. More and more studies showthat accounting conservatism is the most important features in financial reporting, in China’saccounting standards process, the emphasis on the accounting conservatism from weak tostrong. Since2008, the global financial crisis had a huge impact on the financial, peoplestarted to pay attention on accounting conservatism.This study makes the stocks of companies listed in Shanghai and Shenzhen stockmarkets as the objects of study to examine if banks would prefer companies with highaccounting conservation and then incorporate the result into the process of determining theamount of debts. In addition, we classified the samples according to property in this paper.According to the study, we find that there is significant positive relationship betweenaccounting conservatism of listed companies and the loan amounts, either under the situationof the total samples, or of the long-term debts, or of the credit loans. That is to say, it is forcompanies with high accounting conservatism to obtain more loans from banks. Also theresearch find that compared with private enterprises, other things being equal, thestate-owned enterprises obtain more bank loans.