An Empirical Research On The Impact Of Listed Companies’ Internal Control Quality On Accounting Conservatism

Along with the increasing development of economic globalization, the competitions of the economic market are more and more drastic. Improving the quality of the accounting information and keeping the accounting conservatism is the most important way of strengthening the Chinese corporations’ competitive strength. Accounting conservatism is a popular accounting principle accepted by the entire world, it is an important character of accounting report. This principle requires the company keeping cautious in affirming and measuring the incomes and assets, affirming the costs and the liabilities earlier and affirming the incomes latterly. Nowadays, the accounting conservatism of the listed companies need to improve as soon as possible, and perfect internal control system to improve the operational effectiveness of control operating risk and guarantee the quality of accounting information has a very important meaning, and the effective implementation of the internal control system under the influence of ownership structure of enterprises. The companies listed on the main board of stock exchanges in China are mandated to carry out the “Implementation Guidelines for Enterprise Internal Control” from 2011, mandatory disclosure of internal control information become a realty in China. Under the above circumstances, we will systematically analyze the economic effects of internal control quality on accounting conservatism, and then analyze the relationship between internal control quality and accounting conservatism in different ownership structure. Based on theoretical analyses and empirical tests, we obtain conclusions as below:(1) Low quality of internal control has reversed effect on accounting conservatism.(2) Compared with the non-State-owned companies, State-owned companies’ internal control to reduce the impact of accounting conservatism more absolute control and separation of ownership and quality of internal control of accounting conservatism more significantly. Finally, according to the findings, in order to improve the internal control system of enterprises, increase in equity structure and optimization of accounting conservatism makes policy recommendations.