A Study On The Relationship Between Accounting Conservatism And Financing Constraints

As one of the most ancient principles of accounting recognition and measurement,accounting conservatism has been disputed due to the biased estimation of uncertainty.Theoretically,accounting conservatism can alleviate asymmetric information and the principal-agent problems by improving the quality of accounting information,but also,it have a negative impact on enterprise financing on account of underestimation of the assets and income.Therefore,this paper aims at examining whether accounting conservatism can effectively relieve the financing constraints by empirical analysis,and then explore the difference of the impact in different stages of life cycle from the dynamic perspective of enterprise life cycle,thus providing theory support and empirical evidence for the formulation of accounting principles and the choice of accounting policy.After the systematic review of the related literature,this paper analyzes the inherent relationship among accounting conservatism,financing constraints and enterprise life cycle based on the theory of the contract theory,principal-agent theory,signaling theory and pecking order theory.Then selecting the 2011-2015 relevant data from all listed companies in Shanghai and Shenzhen A-share,this paper proves that accounting conservatism can relieve the financing constraints.After further research from the view of enterprise life cycle,it shows that accounting conservatism of enterprises in growth stage can more significantly relieve the financing constraints compared with enterprises in maturity stage with other conditions unchanged.And meanwhile,it demonstrates that accounting conservatism of enterprises in decline stage can less effectively relieve the financing constraints compared with enterprises in maturity stage.Finally,this paper puts forward pertinent suggestions for enterprise development and points out the deficiencies on the basis of the above research.