Managerial Power、Creditors Constraint And Accounting Information Transparency

Accounting information transparency as one of important problems in the capital market has got long-term attention in the theoretical and practical circles. In 1996, the US Securities Exchange Commission(SEC) firstly proposed the word "transparency", which was released on the "core principles" statement of International Accounting Standards Committee(IASC). Since then, the accounting field has raised a hot wave of research on transparency. Arthur Levitt has mentioned "transparency" many times in his speech, while our late accounting professor Ge Jiashu had called for the urgency to definite "high quality" and "transparency" long ago. However, accounting scandals In the capital market have proven that accounting information transparency is low, which can lead to serious economic consequences. It can not only influence the decisions of corporate management, but also increase the supervision and transaction costs of capital market. Further, the behavior of market transaction will be distorts, and the development of capital market in our country will be hindered. Therefore, it has important theoretical and practical significance to effectively identify and improve accounting information transparency. In the production management, the manager decides the content and degree of the accounting information disclosure, due to information asymmetry and agency conflicts, it is easy to breed through the manipulation of accounting information disclosure to maximize the private interests of the opportunism behavior. Therefore, manager’s self-interest behavior will affect accounting information transparency. And power is an important influence factor, managers must rely on their decision-making power of accounting information to make their rent-seeking behavior become a reality. However, the power of information disclosure will be restricted by corporate governance mechanism. Creditor as a kind of supervision mechanism can suppress management to abuse free cash flow by financial pressure and bankruptcy risk, strengthen the supervision of shareholders to management opportunism behaviors, thus preventing the management from manipulating information disclosure for their rent-seeking behavior. In addition, due to different sources of debt, the level of creditors to participate in corporate governance is various. Therefore, their impact on accounting information transparency is also different.In view of the existing research and the background of economic transition in China, and using the empirical data from 2006 to 2013, this paper explores the relation of management power, creditor’s governance and accounting information transparency based on principal-agent theory, asymmetric information theory and incomplete contract theory, attempting to provide empirical evidence for improving accounting information transparency of listed companies. The results show that: firstly, the greater the managerial power is, the lower the accounting information transparency is. The abuse of management power will more easily breed the rent-seeking motive and promote management to use the "window dressing" of accounting information to hide their opportunism behavior, which results in the decrease of authenticity and reliability of accounting information. Secondly, creditor’s constraint can improve company information transparency, so as to play a role on the corresponding external governance. The influence of creditor’s constraint on information transparency is mainly reflected in the supervision of short-term earnings. In addition, suppliers have more constraints than bank on the governance efficiency of accounting information transparency. Thirdly, creditor’s constraint mechanism can inhibit management’s opportunism in a certain extent and ease the negative impact of management power allocation on accounting information transparency of listed companies, but this effect is not obvious. Debt may restrict the rent-seeking behavior of management under the situation of asymmetrical information, but also may intensify the opportunism motivation of management to manipulate accounting information. Therefore, the creditor’s constraints cannot effectively reduce the negative effect of managerial power to the transparency of accounting information of listed companies.According to the results of the research, this paper puts forward some related suggestions, including perfecting the information disclosure system, strengthening the internal governance mechanism and constraining management self-interest behavior, protecting the interests of creditor and strengthening the creditor’s constraint mechanism. However, my limited level may make the results have some deviation. For example, the measurement index of accounting information transparency is not comprehensive, so future research can explore how to select a more comprehensive and reliable indicator to measure accounting information transparency of listed companies.