Research On The Effect Of The Professional Characteristics Of The Board Of Directors On Accounting Conservatism

Accounting conservatism is one of the characteristics of accounting information quality requirements. And it is also accounting recognition and measurement principles. The board is the core of corporate governance, as the link between shareholders and managers, whether they have enough expertise to perform its duties, is the management the key to determine the effective supervision and management of the company. And to reduce the agency cost which produce because of the separation of the ownership and operation, to increase the company’s accounting conservatism level. Therefore, there is a significant influence between the board professional characteristics and accounting conservatism level.The paper has done theoretical analysis of the board profession characteristics, accounting conservatism and the relationship between the board profession characteristics and accounting conservatism on the basis of the literature review. The paper takes 2011-2013 China’s Shenzhen Motherboard A-shares a total of 970 listed companies as sample, from the perspective of internal characteristics, reputation characteristics and external characteristics of the board of directors, the paper selects professional age, professional background, education level. The overseas background, professional background, CPA background and university background as explanatory variables in total seven board professional characteristics. Firstly, using the EVIEWS and SPSS software are applied in the descriptive statistics. Then with the reference of Basu model, the regression model is constructed. Using OLS least squares regression to research the effect of the profession characteristics of the board of directors to accounting conservatism of listed companies. It is found there is positive relationship between the board profession, qualifications, experiences of the accounting firm and accounting conservatism. There is negative relationship between the board professional age, professional qualifications, university background and accounting conservatism. However, there is no any relationship between the board professional oversea background and accounting conservatism. At last, base on the empirical results, the paper puts forward some policy suggestions for how to fully and effectively play the board function and to improve the level of accounting conservation.