Research Of The Executive Tenure And Accounting Conservatism

Accounting conservatism is an important principle of recognition and measurement of accounting earnings.It is an important area in empirical research.Under the condition of market economy,accounting conservatism as a measure of the accounting information quality standard,not only can restrain enterprise overestimate the motivation of surplus management,also help to alleviate the information asymmetry in the capital markets,thereby lowering the cost of financing and investment risk of the enterprise.Therefore,the study of factors affecting accounting conservatism has been wide concern for theory and practice both at home and abroad.CEOs and CFOs as the highest responsibility and direct responsibility to the quality of accounting information of key executives,according toUpper Echelon Theory,their personal background characteristics such as gender,age,education,tenure,etc.,will undoubtedly important influence on accounting conservatism.But executives tenure compared with their other background characteristics,is the key factor affecting the quality of corporate financial behavior and financial reporting.Therefore,this paper argues that research of the relationship between the executives tenure and accounting conservatism has important theoretical significance and practical significance.The paper aims to study the impact of executive tenure on Accounting Conservatism and the moderating effect of different corporate governance mechanisms on the relationship between the two variables through the combination of theoretical analysis and empirical research.After testing Shenzhen and Shanghai A�share listed companies from 2010 to 2014,this paper draw the following conclusions:(1)the relationship between actual tenure of executive(CEO/CFO)and accounting conservatism takes on an inverted-U shape,the expected tenure of executive(CEO/CFO)was positively associated with the accounting conservatism,both relationship in state-owned companies to show more obvious.(2)the CEO and CFO tenure heterogeneity can improve the level of accounting conservatism;CEOs and CFOs tenure heterogeneity degree is higher,the higher the level of accounting conservatism.Moreover,the direction of CEOand CFO staggered tenure have significant difference on the impact of accounting conservatism,when the CFO term is later than CEO,degree of the accounting conservatism can be increased more.All in non-state-owned companies s to show more obvious.(3)From the whole sample,the board independence doesn't play the function of significant adjustment in the process of executive(CEO/CFO)tenure(actual tenure?expected tenure and the CEO and CFO tenure heterogeneity)influencing accounting conservatism.But in non-state-owned companies,board independence plays the function of positive adjustment in the process of executive(CEO/CFO)antual tenure ? expected tenure and CEOs & CFOs tenure heterogeneity influencing accounting conservatism.(4)the institutional investor shareholding plays the function of positive adjustment in the process of executive(CEO/CFO)antual tenure and CEOs & CFOs tenure heterogeneity influencing accounting conservatism,and the relationship in state-owned companies to show more obvious;and from the whole sample,the institutional investor shareholding doesn't play the function of significant adjustment in the process of executive(CEO/CFO)expected tenure influencing accounting conservatism.But in non-state-owned companies,the institutional investor shareholding plays the function of positive adjustment in the process of executive(CEO/CFO)expected tenure influencing accounting conservatism.