Emirical Analysis On Relationship Between Structure Of Corporate Governance And Accounting Conservatism

Accounting conservatism has become a hot topic of research among thetheoretical circle and the practical circle in recent years. Accounting conservatism is abasic principle of accounting practice. It is also an important quality characteristics ofaccounting information, domestic and overseas scholars have studied deeply in thetopic of accounting conservatism. The research of accounting conservatism began inthe1990s. First, it is mainly about the measuring methods of accounting conservatismand existence of accounting conservatism. Then it gradually develops to the researchabout the causes and economic consequences of accounting conservatism. Domesticscholars began studying on accounting conservatism at the beginning of the centurywith the using of fair value in accounting practice. They have achieved fruitfulresearch results about accounting conservatism in the past ten years. These resultsprovide an important reference for this thesis. Corporate governance results from theseparation of ownership and management of the company and the problem of agency.The objective of corporate governance is to reduce the agent cost and transaction cost,then to increase the value of company and to protect the interests of investors andother stakeholders. Then what kind of relationship between the structure of corporategovernance and accounting conservatism? Is it playing an important role of improvingthe quality of company’s accounting information? Is it can improve the level ofcompany’s accounting conservatism and then protect the interests of medium or smallshareholders and other external stakeholders? These problems are worth furtherthinking. Therefore, discussing how the structure of corporate governance willinfluence accounting conservatism has important significance in theory and practice.Based on the literature review of domestic and overseas scholars, this thesis firstdescribes the using and development of accounting conservatism in accountingpractice of our country and elaborates the concept of the structure of corporategovernance and accounting conservatism. Then it uses the agent theory, insidercontrol theory and stakeholder theory as the theoretical foundation of this thesis. Afterthat this thesis analysis relationship between structure of corporate governance andaccounting conservatism and puts forward the research hypothesis. In hypothesistesting, this thesis selects the data of domestic listed companies from2007to2011asthe sample. Then this thesis puts the relevant variables about the structure of corporategovernance into the basic model of Basu (1997).This thesis uses descriptive statistics,multivariate regression and other statistical methods to test the relationship betweenownership concentration, equity character, independent director and accounting conservatism. The results of study show that:(1) the accounting information of listedcompanies in our country is robustness;(2) there is an inverse relationship betweencompany’s equity concentration and accounting conservatism;(3) state ownership willreduce level of company’s accounting conservatism, compare to the non-state-ownedcompanies, state-owned companies have a lower level of accounting conservatism;(4)the independent director play a positive role in improving the level of company’saccounting conservatism. With the increasing proportion of independent directors, thelevel of company’s accounting conservatism shows a rising trend. Finally, based onthe related theoretical analysis and the results of empirical test, this thesis putsforward relevant suggestions from the aspects of accounting standard construction,shareholder supervision, company’s internal incentive and restraint mechanism andindependent director supervised mechanism.This thesis is divided into six parts. Part one is an introduction. It mainlydiscusses the research background, research significance, research clues and researchmethods and then forms the framework of research about this thesis. Part two is aliterature review of domestic and overseas representative views or related researchesabout accounting conservatism. It mainly elaborates the typical views and researchresults from domestic and overseas scholars about accounting conservatism, and thenappraising these literatures. Part three is the summary of structure of corporategovernance and accounting conservatism as well as theoretical basis, it is mainlyabout the using of accounting conservatism in accounting standard of our country andthe overview of structure of corporate governance and accounting conservatism, andthen puts forward the theoretical basis of this thesis. Part four is theoretical analysisand hypothesis about the topic of this thesis, it is mainly the theoretical analysis ofrelationship between structure of corporate governance and accounting conservatism,and then puts forward the research hypothesis. Part five is empirical analysis. Itmainly includes sample data collecting and sorting as well as empirical test. Part six isconclusions and suggestions of research. It summarizes the research conclusions andputs forward the suggestions according to the theoretical and empirical analysis.Limitations in this thesis and future direction of research about accountingconservatism are also pointed out.