Research On Managerial Overconfidence?Corporate Governance And Accounting Conservatism

Accounting conservatism has been one of the accounting academic concerns,especially after the 2008 financial crisis in the United States and thus evolved into a global financial crisis,people are aware of the importance of accounting conservatism.The results show that management excessive self-confidence affects their decisions,and ultimately affect the company's operating efficiency and effect,damage corporate value.While accounting conservatism lies in the choice of management,and China's accounting standards also allow management to carry out professional judgment according to actual situation,providing a choice in accounting policy.Since the owners and management belong to the agency relationship,presenting information asymmetries,management will make irrational accounting policies for their own utility maximization,and ultimately impacts accounting conservatism.In order to reduce agency costs between shareholders and management,improve the quality of accounting information,the company is seeking to establish governance mechanisms to encourage and oversee the company's management,and reduce the harm caused by deviation from the target,create a good market image.Therefore,throught 2011-2014 data of the Shanghai and Shenzhen A-share companies,this article researches how management overconfidence affects accounting conservatism level,also for restricting management irrational behavior,improving the quality of accounting information,companies establish governance mechanisms,so adding variables of corporate governance,selects the ratio of the largest shareholder,the proportion of state-owned shares and asset-liability ratio variables,examining whether these variables can restrict the overconfidence of management cognition's deviation on the accounting conservatism level.The empirical results show that overconfidence of management reduces the level of the company's accounting conservatism,ownership concentration degree and state-holding do not alleviate the negative effect,and debt restraint the effect and control the management of overconfidence psychological factors.Finally,it puts forward the countermeasures and suggestions.The enterprise shall avoid higher ownership concentration,the shareholding ratio of the first large shareholder should be controlled,national regulatory authorities should improve the supervision,appointment and assessment mechanism of the state-owned holding company management layer,creditors should play an effective role,help enterprises improve the level of accounting conservatism and corporate governance environment.