Study On The Impact Of Accounting Conservatism On The Cost Of Equity Financing Of Listed Companies

The quality of accounting information has long been the focus in the field of accounting.With the development of the market economy,the external investors pay more and more attention to the risk level of enterprise information,and will demand a higher degree of transparency and publicity of enterprise information.A new round of attention to the accounting conservatism has been set off.On the current domestic development situation,equity financing is the main way for enterprises to raise funds,equity financing cost becomes one of the important concepts in the field of financial management.The level of equity financing cost will be affected by enterprises,and the quality of accounting information is one of the important factors affecting the equity financing cost.Consequently,questions like how will accounting conservatism affects equity financing cost,which factor generates that kind of affect,and what is the path between accounting conservatism and equity financing cost are the research content of this paper,and need to be studied and verified.In our study,we carried out theoretical analysis to the theory and literature review of relevant contents,we carried out empirical test to whether accounting conservatism has conduction effect through stock liquidity,corporate value and corporate governance to equity financing cost by establish VAR model,results of causality based on Ganger,impulse response function and variance decomposition,and we analyzed the relationship between accounting cons.ervatism and equity financing cost.We select A shares traded in Shanghai and Shenzhen as research object,January,2006 to December,2016 as sample interval by using quarterly data,and 1165 companies as research sample to carry out empirical test.We found that the conservatism of accounting information exists generally in China s Listed Companies,and it has become one of the essential characteristics of financial reporting.The liquidity of stock and company value has mediating effect on the relationship between accounting conservatism and equity financing cost.Accounting conservatism reduces equity financing ccost through its positive effect on company value and stock flow.Corporate governance has an inverse causal relationship with accounting conservatism,and it does not have any relationship with equity financing cost.Finally conducted a test based on the real estate industry.The paper chooses the data of listed companies in China's real estate industry as a test sample in 2016,and uses the method of horizontal comparison to have a negative correlation between accounting conservatism level and equity financing cost.