The Protection Effect Of Accounting Conservatism On The Creditor

One of the most important functions of accounting is to provide useful information for stakeholders,so it is necessary to develop a set of effective accounting information quality characteristic system.Accounting conservatism? ?a long-standing and controversial accounting information quality requirement,it is getting more and more attention today.Since the accounting conservatism was removed from quality requirements by the FASB,studies on accounting conservatism of positive and negative voices all come in a throng.On the basis of summarizing the existing research conclusions,this paper proves the existence and value of accounting conservatism.After that,this paper hopes to make a theoretical research and proof of the role of accounting conservatism in the protection of creditors.In the credit market of our country,the bank is the most important creditor.However,as a party to the credit market,the bank often suffers from infringement because of the lack of information or delay.Due to the special capital structure,the weak legal protection and the imperfect economic system of our country,the creditor is often difficult to maintain their rights through legal means.This paper is based on the theory of asymmetric information,and combined with the contract theory and the background of our country's property right system,trying to verify whether accounting conservatism can make a contribution to protect the interests of creditors.In order to verify the accounting conservatism can protect the interests of the creditors through what channels,this paper study the two problems which are the most common cause of information asymmetry: adverse selection and moral hazard.Under this theme,this paper chooses over investment as an alternative variable of corporate moral hazard,uses the debt cost and the long-term loan proportion as the alternative variable of adverse selection.And discuss the differences of the accounting conservatism of the enterprises under the different property rights background.Through this research,it is found that in our country,accounting conservatism is universal existence.And accounting conservatism has a negative correlation with over investment and debt cost,but has a significant positive correlation with the proportion of long-term loans,this is sufficient to prove that accounting conservatism can help to protect the interests of the creditors from suppression of moral hazard problem and the problem of adverse selection.Through the further classification and verification of the data,this paper found that the accounting treatment of the state-owned listedcompanies and non-state-owned enterprises in China have the accounting conservatism,and can provide the protection of the creditors.Through oretical analysis and a series of empirical studies,this paper verifies the accounting conservatism has ability to protect the interests of creditors.