The Correlation Research Between Female Managers And Accounting Conservatism

With the development of society, Chinese traditional values such as “ThreeObediences and Four Virtues” and “Man is Superior to Woman” have been no longerentrenched, nor women’s shackles of pursuing careers. Chinese female is graduallygetting rid of the role of “Wife and Mother”, and occupies increasingly importantpositions in male-dominated commercial society. There is no doubt that female makesremarkable achievements, which attracting an enormous amount of attention. It iswidely believed that women’s risk appetite, decision-making and management style isdifferent from those of men due to their different personality traits and thinking mode.This phenomenon will affect the important decision and financial behavior ofenterprises, which has a significant impact to accounting information quality.As an important measuring index of accounting information quality, accountingconservatism catches the public eyes. After hundreds of years of development,accounting conservatism evolved into an accounting principle of many major countriesstep by step.2006, China’s ministry of finance issued “Accounting Standard forBusiness Enterprises: Basic Standard”, and regarded accounting conservatism as one ofaccounting information quality characteristics. However, with the objective of financialreporting transforming” Accountability view” to “Decision usefulness view”,accounting conservatism has been pushed to the cusp of public opinion. InternationalAccounting Standards Board (IASB) and Financial Accounting Standard Board (FASB)thought that conservatism conflicts with many other important quality characteristics,therefore banned it in the third chapter of “Joint Conceptual Framework Project” in2010. But now, China still attaches great importance to the application of accountingconservatism, especially when facing rapidly changing economic conditions, turbulentfinancial market, and complex accounting environment. Enterprises suffer more riskunder a cloud of uncertainty, so accounting environment principle can help inhibitopportunism, improve accounting information quality, and then protect the interests ofall stakeholders. Existing literature at home and abroad provides a wide range ofevidence about the influencing factors of accounting conservatism, but little based onthe female managers. This paper tries to explore the relationship between femalemanagers and accounting conservatism on various aspects. Based on the data of Shanghai and Shenzhen A-share listed companies from2011to2013, this paper empirically examines the impact of female managers on accountingconservatism by using Basu (1997) model. First of all, this paper examines the existenceof accounting conservatism in Chinese capital market. Secondly, this paper selects thefollowing aspects such as the existence and ratio of female managers, the average age,average educational background and average tenure of female managers, as well as thegender of CFO, and then investigates the relationship between female executives andaccounting conservatism. Finally, this paper carries on the robustness test. The resultshows:(1) Accounting conservatism exists generally in Shenzhen and Shanghai A-sharelisted companies.(2) Both the existence and ratio of female managers significantlyincrease accounting conservatism.(3) There are significant positive correlation betweenthe average age, average tenure of female managers and accounting conservatism. Theaverage educational background have positive effect on accounting conservatism, butnot significant.(4) The gender of CFO has no remarkable impact on accountingconservatism. This study not only broadens the theory system of female managers, butalso enriches the existing research of the factors that affect accounting conservatism.Meanwhile, this paper offers some enlightenment on the construction of managementteam, also provides some reference on reviewing accounting conservatism principle inChina.