Empirical Study On The Influence Of Accounting Conservatism Upon The Inefficient Investment Action Of Listed Companies

In the process of the accounting standard’s international coordination, theresearch result of the first stage of Financial Accounting Standards Board(FASB)and International Accounting Standards Board(IASB)’s joint concept frame waspublished in September2010. However, accounting conservatism was notregarded as useful quality characteristic of financial information, which causedthe research boom to accounting conservatism in domestic and foreign academiccircles, particularly, to the research of the accounting conservatism’s economicconsequence. During recent years, efficient investment became a hot topic in thefield of social economy development and corporate finance. Nevertheless,inefficient investment, which includes over investment and under investment,has become a common phenomenon among the listed companies of our countryand is more serious than the western countries. Hence, owing to the specialsystem of our country, it is necessary to further research how the accountingconservatism influences the inefficient investment action of the c ompany.On account of Principal-agent Theory and Asymmetric Information theory,this paper conducts theoretical analysis and empirical research on the effect ofthe accounting conservatism’s influences on inefficient investment behaviors.This improves the theory system of the economic consequences of Comparativeanalysis and has great practical significance to the improvement of theenterprise’s investment efficiency. Firstly, induce and comment the researchstatus at home and abroad on the problem of how the accounting conservatismand inefficient investment action, which is contribute to the determination ofresearch goal. Second, the concepts of accounting conservatism and inefficientinvestment are determined and the applicability of measure models are analysecomparatively. Then analyse the mechanism of how the accounting conservatisminfluences over investment and under investment in the view of Principal-agentTheory and Asymmetric Information theory, and elaborate the degree of theinfluence under different property rights nature, which is the basis of empiricalresearch. After that,3303samples of the Shanghai and Shenzhen A shares during2008to2010are chosen to construct multivariate regression model to researchthe relativity of accounting conservatism and efficient investment and conductthe empirical test. Then grouped regression method is used to further researchhow the accounting conservatism influences inefficient investment action underdifferent property rights nature. At last, the conclusion is drawn on the basement government、corporates and other stakeholders, which is helpful to optimal theinvestment decision of corporates and is advantageous to the supervision andmanagement of government、banks、external investors and other stakeholders.