The Ultimate Nature Of Property Rights The Executives Shareholding With Accounting Robustness

Chinese capital market has formed three equity ownerships named state-owned shares,legal person and the social public offerings after the reform of non-tradable shares.Under these three different property rights,the executives shareholding may still influence accounting conservatism in terms of the following two points: the first is stimulating the enthusiasm of executives and reducing principal-agent cost so as to create more value for the enterprise;the second is that because the phenomenon in the theory of principal-agent "managers self-interest behavior" still exists,executives may manipulate the company's financial information in order to achieve the performance,which leads to reduce the robustness of accounting information.Based on the data of a-share market in China from 2010 to 2015,the present paper conducts a comprehensive analysis on executive shareholding,the ultimate nature of property rights,the relationship between the ultimate nature of property rights and executive shareholding and the relation between executives shareholding and accounting conservatism under the ultimate nature of property rights.The empirical analysis with our national condition provides the following founds: state-owned enterprises and the executives shareholding are negatively related to the accounting conservatism with a significant effect;Legal person share holding enterprises and executives shareholding are negatively related to the accounting conservatism with non-significant effect;Social public offerings holding companies,and executives shareholding are positively related to the accounting conservatism and the effect is remarkable.The reasons for this result mainly include:(1)the absence of the ownership of the state-owned assets results in the government intervention and the insider control problem.Besides,the layers of principal-agent relationship in the state-owned enterprises make it difficult to supervise the state-owned assets,and the executive group results in the decreasing of enterprise accounting conservatism.(2)the Chinese capital market is at a immature stage and the market itself is not sound.Thus the legal person share holding shareholders will make short-term investment to interest arbitrage.The legal person share shareholders' failure to supervise the company executives reduces the robustness of accounting information.But perhaps the legal system construction reflected in the recent market reform makes the regulatory environment improved.That is why the executives shareholding has a negative relation with the accounting conservatism with a non-significant effect in the legal person share holding company.(3)With regard to the social public holdings of listed companies,listed companies' performance will be directly related to the social public interests.The controlling shareholder in the social public offerings holding company has a strong willingness to supervise executives.Thus it is a slim chance for the executives to gain profit by internal control.What's more,the proportion of executives shareholding in this kind of company is high.Executives can enjoy the fruits of enterprise long-term residual income so that they will really focus on the long-term development of the enterprise.The consistent interests between executives and shareholders in social public offerings holding company display that the executives shareholding is positively related to the accounting conservatism and the effect is remarkable.To improve the ways to deal with the relationship between the executives shareholding and accounting conservatism in different ultimate natures of property rights,four suggestions are proposed:(1)continuously develop the China's capital market and improve the state-owned holding company supervision mechanism;(2)strengthen market supervision and improve the legal person share holding company supervision mechanism;(3)open the market further and promote the development of social public offerings holding companies;(4)every company should improve the quality of the Executives and the internal governance structure of the enterprise.