The Effect Of Accounting Conservatism On Corporate’s Over Investmen

Investment is one of the three dr iving coaches to pull macroeco nom ic growth, and it is also the core content of m icro enter pr ise pr oduct ion and managem ent. Keeping appr opr iate size of the investm ent and econom ic growth rat e can be a condit ion for the innovat ion. However in the separat ion of two r ights in the modern ent erpr is e, on-the- job consumpt ion, managers build "Bus iness Empire”, manag ers defending and entrenchm ent effect, plenty of free cash f low and other factors lead managers to invest on t he personal r ich inter ests, but over all net pres ent value for the negat ive it ems, and caused t he problems of over- investm ent.As an eff ective m echanism to solve the agency problem between shar eholders and management, account ing conservat ism can reduce the inform at ion asymm etry between managers and creditors, so as to ease t he problem of over investm ent. Whether the exist ence of local governm ent int ervent ion, soft budget constraints, exter nal supervis ion and ot her factors lead to the differ ent ult imat e ownership control enter pr ise’s account ing conservat ism and over investment lev el show signif ic ant differ ences, whether account ing conservat ism to different ult imat e control r ight ent erpr is e play the sam e improvem ent on over investm ent and improvement on the companies’ value.According to t he "ult im at e ownership theory" t o the enterpr is e the divis ion st andard,t he paper subdivide all the lis t ing corpor ates int o three types, inc luding centr al governm ent ult im ate holding company(the centr al st at e-owned enterpr is es), local government ult im ate holding company( local stat e-owned enterpr is es) and pr ivate pr operty holding ent erpr is es(privat e ent erpr is es). K&W index model is used to study the account ing conservat ism level of sample enter pr ises, Measur ing ent erpr ises’ over investment level by Richardson model, Construct ing t he ult imat e contr ol r ight, account ing conservat ism and over invest ment model are construct ed by dividing all sam ples into t hree groups, Which provide empir ical evidence for understanding the value of accounting conservatism on corporate governance.The results of this paper are as follows:1. The dem and of account ing cons ervat ism for differ ent ult imate controlling equity firms is differ ent. The account ing conser vat is m of pr ivate enter pr ises is higher than the state-owned ent erpr is es. Impacted by the gover nment level factor, the centr al ent erpr is es accounting conservatism is higher than the local government control.2. Diff erent ult im at e controlling r ights corporat es’ over investment level showed significant differences, private enterprises’ over investment level is higher than state-owned ent erpr ises, local stat e-owned ent erpr ises over invest ment is higher than the level of central state-owned enterprises’.3. The account ing conservat ism has a weak governance eff ect on the ent erpr ise over investm ent. Account ing conservat ism played alleviate the governance effect on over investm ent behavior in pr ivate enterpr is es, but in the local and centr al state- owned enterprises are not significant.The innovat ion of this paper lies in the fact that the list ing Corporat ion can be divided into two categor ies : state-owned and non state-owned. The control level of the state- owned list ing Corporat ion is furt her tr aced. The ult imat e control r ight of enterpr is e is combined with account ing conservat ism and over investm ent. The conc lus ion of t he stud y enr iches t he content of the economic consequences of accounting conservatism.