Internal Control、accounting Conservatism And Investor Protection

In the modern enterprise system, the separation of ownership and opearation rights is one of the most important feature,which makes principal-agent relationship become more and more common in the modern enterprise. Due to the agent directly involved into the management activities of campany, the small and medium-sized investors are vulnerable groups of information in the agency relationship. Causing the controlling shareholders will seize the benefit from the small and medium-sized shareholders and self-interest behavior of agent.How to reduce the behavior of the controlling shareholder seize the interests of minority shareholders and how to reduce the cost of agency are the two important problems,which need to be solved in order to protect the interest of investor. Accounting conservatism both as a measure of whether the accounting information is the important characteristics of high quality, or as a beneficial to improve the corporate governance mechanism, can promote the ascension of the level of investor protection. The origin of the internal control is the principal-agent problems, to solve the information asymmetry is an important problem. Agency problems and information Problems are the keys to protect the interests of investors. Therefore, the internal control from the beginning to have function and responsibility of the protection of investors. But after when i consulted the related research literature, I found that the literature,which put the internal control, accounting conservatism and investor protection together to study was rare.Based on this, this article through the literature research, quantitative analysis, accounting method, from the perspective of dual agency cost, internal control, accounting conservatism both and investor protection combined to study. I hope the researches of this paper can provide theoretical support to the investor protection policy; can provide reference basis to the perfecting internal control system; can provide the empirical to decide whether to stay accounting conservatism in the standard of accounting or not.In this paper, on the basis of relevant research results at home and abroad for reference, we set the theory of investor protection, signal transmission theory, principal-agent theory as the theoretical basis, the relationships between the internal control, accounting conservatism, and the investor protection are analyzed in theory At the same time this article sets 2011-2013 a-share manufacturing listed companies in our country as the research sample;Set Khan and Watts(2009) year- the company’s method as the measurement of accounting conservatism; Set the method of hong xing fang and zhi ping zhang(2012) using the internal control information disclosed by the company and combined with the internal control goal to remedy the situation as the measurement of internal control; Set the double agent cost as the measurement the level of investor protection and select the relevant control variables; Through descriptive statistics, correlation analysis and multiple regression analysis method, the relationships between internal control, accounting conservatism, and the investor protection have carried on the empirical test.Through the above theoretical analysis and empirical test, this paper get the main conclusions are:(1)the internal control can obviously inhibit the controlling shareholders encroach on the interests of small and medium shareholders, which can also reduce the agent cost of agent, but no significant statistically.(2)Accounting conservatism can obviously inhibit the controlling shareholders encroach on the interests of small and medium shareholders,which also can significantly reduce agent agent cost,so accounting conservatism is advantageous to the investor protection.(3)The internal control and accounting conservatism have complementary effect in investor protection.The researches of this paper can provide theoretical support to the investor protection policy; can provide reference basis to the perfecting internal control system; can provide the empirical to decide whether to stay accounting conservatism in the standard of accounting or not.