Study On Managers’ Power And Accounting Conservatism

Modern corporate governance characteristics of separation of ownership andconrol allows the enterprise managers to master the real accounting information, theirbehavior to a certain extent affect the quality of accounting information, at the sametime also affect accounting conservatism. Based on the theory of behavior, thebehavior of the individual or group boundary subject to the rules and constrains, thestrength of the behavior subject to motivation, and behavior may be subject to power.Such an analysis framework for managers in terms of disclosure of accountinginformation is the same, managers disclosure is bonded by both established rules(accounting standards and accounting information disclosure system), outside theconstraints (environmental), their motivation (self-interest), and their own power(power entrusted agent). However, the existing relevant research mainly focused onthe research established rules, both outside the constraints of the motivation and itsinfluence on accounting conservatism, and the lack of the right to their own managers(power) analysis. Therefore, to study the effect of managers’power and accountingconservatism, alleviate the information asymmetry between the owner and operator,has certain theoretical value and practical significance.Based on China’s current low level of enterprise accounting conservatism andrealistic background of the accounting information quality is not high,so this paper cutmanagers’power into perspective to study the influence law of accountingconservatism. Firstly, raising the economic man hypothesis, agency theory,asymmetric information theory, behavioral asymmetry theory, control theory and thetheory of high-level management to extract the theoretical basis of managers’ powerand accounting conservatism, building the theoretical framework and put forward thehypotheses, using2007-2012Shenzhen and Shanghai A-share listed companies assamples and Basu (1997) model of accounting conservatism built directly joinresearch needs variable to study its effect on accounting conservatism.The empiricalresults show that the system of ownership of power, organizational power reduces theenterprise level of accounting conservatism, expert power and prestige power raise thelevel of enterprise’s accounting conservatism; After to distinguish the different natureof property rights of enterprises, this paper found the non-state enterprise managers’ownership power, the structural power and expert power and prestige power influenceon accounting conservatism more significantly than the state-owned enterprises (including the ownership power and the structural power has a negative effect onaccounting conservatism, expert power and prestige power has a positive effect onaccounting conservatism). Paper according to the research conclusion put forward toperfect the information disclosure system, making effective incentive mechanism,perfecting the executive hiring and appraisal system, strengthening internalmanagement, strengthening the supervision of state-owned enterprise managers suchas policy recommendations.This paper as a sociological thought, from the perspective of the personal powerstudy on accounting conservatism. Accounting has been discussed with managerspower as the core and robustness, the relationship between accounting conservatismprovides a new perspective for research, and based on the background of the differentnature of the property, research the influence of the power for the managers of listedcompanies accounting conservatism, complement the study of the influence factors ofaccounting conservatism, also offers a new way to improve its level.