Investor Sentiment,Managerial Overconfidence And Accounting Conservation

Accounting conservatism should be cautious in the process of accounting measurement and records, the overstate assets and income should not be overstated, also the liabilities and expenses should not be understated. It is one of the most important principle in accounting. Accounting conservatism is not only an important feature of financial reporting information quality, but also an effective corporate governance mechanism, it has become a hot topic in the research of accounting in recent years.The research in our country and abroad mainly about the debt contract, characteristics of the board of directors, ownership structure, corporate listing and external auditor point of study on accounting conservatism. Traditional research is based on "rational economic man" as the premise, but in the real market, irrational managers and investors irrational usually exist at the same time, managers overconfidence is one of the most common performance in managers irrational. This article selects managers overconfidence and the perspective of investor sentiment, to explore how the double irrational managers and investors will affect the enterprise accounting conservatism. Due to the reason and effect of condition conservatism and unconditional conservatism and economic are different, so the article will decomposed conservatism into conditional accounting conservatism and unconditional conservatism research respectively.In order to study this problem, we select the A-share listed companies inShanghai,Shenzhen capital market between 2007 and 2010 as the study sample.Empirical Study of Managerial Overconfidence and accounting conservatism suggeststhat managerial overconfidence and Conditions of accounting conservatism andnon-conditional accounting conservatism was negatively correlated; In addition, thepaper discusses the relationship between investor sentiment and overconfidence amongmanagers, the results showed a positive correlation between the two, that investorsentiment and managerial overconfidence will cross contamination; The research ofInvestor sentiment and accounting conservatism show that investor sentiment andaccounting conservatism are negatively correlated. Research of this paper broaden theresearch perspective of accounting conservatism, offers a new way to improve theenterprise accounting conservatism, has important practical significance.