The Relationship Between The Political Background Of Listed Companies And Accounting Robustness

Conservative accounting principles refers that it can reflects timely damage and confirm tardily earnings in the released accounting information, which can more truly reflect the operating results of an enterprise and is advantageous to the enterprise to steady financial accounting, furthermore, helps the enterprises enhance the competitiveness. Now China’s economy is in transition, in the case of today’s evolving market economy, the behavior of government intervention in the economy will have an important impact on the enterprise, thereby affecting the efficiency of the market economy. In this paper, this is the idea to study how the business of natural and acquired political ties affects the conservative accounting principle.Firstly, the paper explains the government intervention in economic theory and accounting conservatism theory, then analyses the accounting conservatism’s performance of the state-owned enterprises, private enterprises, and different levels of state-owned enterprises, private enterprises as well as the different types of businesses in different regions. Based on Basu model and the data for the period of 2010-2013, the paper makes a regression analysis. The results show that the political affiliates will have a negative impact on its accounting conservatism, different levels of government control of state-owned enterprises in the accounting conservatism’s performance is different; the level of government intervention and market-oriented enterprises in different regions will exhibit different accounting conservatism.