Study On The Influence Of The Characteristics Of Board Of Directors Among Listed Companies On Accounting Conservatism

The board is the core part of internal governance mechanisms in a company, which is also one of the important decision-making and supervision organizations. As a connection between shareholders and managers, the board of directors is responsible for shareholders. Their responsibility includes supervising and controlling managers’ business behavior, that managers are the subject to provide accounting information. Accounting conservatism is always the tradition and principles of accounting recognition and measurement, which is one of the important characteristics of quality requirements of accounting information. If the board of directors can take advantage of their supervision and control function, accounting earnings operating behaviors against shareholders’objectives would decrease, and increase the cost of managers providing unconservative accounting information, and improve corporate governance effect, so the accounting conservatism is improved. Therefore, the board of directors has a close relationship with accounting conservatism. The influence of characteristics of board of directors among listed corporation on accounting conservatism will be worthy of in-depth study. And whether this influence will be different according to different ownership of listed companies, this paper hopes to solve the problem.On the normative analysis, this paper has done theoretical analysis of the board characteristics and accounting conservatism on the basis of the literature review. And the relationship between the board of directors and accounting conservatism has been clarified through integrated use of principal-agent theory, asymmetric information theory and contract theory. On the empirical analysis, taking2007-2011China’s A shares a total of6793listed companies as samples, this paper selects the scale of board of directors, two positions about chairman and general manager, the proportion of independent directors, situation about the audit committee, the shareholding ratio of board of directors and the number of board meetings as explanatory variables in total six board characteristics. Firstly, the SPSS17.0software is applied in the descriptive statistics and correlation analysis on the board, and then with the reference of Basu basic model, the regression model is constructed. Empirical tests demonstrated the effects of board characteristics on accounting conservatism. And the listed companies are divided into state-owned holding companies and non-state-owned holding companies in accordance with the nature of equity, and this paper compares the difference of each effect respectively.The conclusion shows that:(1) the scale of board of China’s listed companies, separation of chairman and general manager, the establishment of audit committee, the shareholding ratio of board of directors and the number of board meeting have a positive and significant influence on accounting conservatism, however, the influence of the proportion of independent directors on accounting conservatism is not obvious.(2) In different ownership property, the effect of the characteristics of the board on accounting conservatism is different:①the scale of state-owned holding companies’ board has a positive and significant influence on accounting conservatism, but the scale of non-state-owned holding companies’board has no obvious influence on accounting conservatism;②whether in state-owned holding companies or non-state-owned holding companies, the proportion of independent directors has not obvious influence on accounting conservatism;③comparing non-state-owned holding companies with state-owned holding companies, the separation of chairman and general manager, the establishment of audit committee, the shareholding ratio of the board of directors in non-state-owned holding companies have more obvious influence on accounting conservatism;④board meetings of state-owned holding companies have more obvious influence on accounting conservatism than non-state-owned holding companies.According to the empirical results, this paper puts forward some policy suggestions for reference to improve board governance effect and accounting conservatism:①choosing the appropriate board size according to the actual situation of listed companies;②improving the institution of independent directors of the listed companies;③promoting the establishment and development of the audit committee;④increasing the proportion of board shareholding properly;⑤arranging board meetings reasonably and promoting the quality of the meetings.