Institutional Environment、the Conservatism Of Accounting And Shares Plunged Risk

Since 2015,slumps occurred in China stock market. The slumps may impact the normal order of the capital market, which leads to the chaos of financial system. It finally hits the real economy in China. It is of great practical significance to study on the slumps risks and analyzing its causes, exploring valuable procedures. In the research literature of stock slumps, some researchers studied the slump factors from the aspects of auditing, tax planning and others. Many of these studies are based on the micro perspectives.Morck(2000) and others finds that, it is easier to occur stock slumps in less developed countries or regions where financial markets are less developed. Morck and Jin(2006) believe that in the national macro level, if system of protection for investors are more perfect, the markets play a better decisive role in the economic development process completely. By studying the effects of tumbling media governance, Du Xing qiang(2014), indirectly finds out there is a more development govern institution in a better institution government. It has promoted in the area of corporate transparency, which reduces the risk of tumbling. Compared with Europe and America for decades or even centuries of development, the development of China’s stock market is in short time, and the capital market is imperfection, the related system is not perfect. That is the main reason making the stock market rises and falls. Therefore, I study how to affect companies and, ultimately, affect the risk of plunging in the macro-level environment.This paper uses the a-share listed companies in Shanghai and Shenzhen from 2011 to 2014 as samples and gets the Panel data by the STATA.14 statistics software to study the relationship between the accounting stead and the risk of share slumps. The empirical results show that if the company uses a more stead accounting policy, the less risk of stock slump will be in the future. In a better system environment, the stead of company’s accounting will be better than these whose are in a worse environment. The development of system environment reduce the bad effects between accounting stead and stock slumps. That is to say, the better system environment, the less risk of stock slumps. This shows that the economic market of China has made great achievements so that it decrease the risk of slumps.