Research On The Impact Of Founder Succession On Accounting Information Quality

Entrepreneurial firms,especially those in emerging markets,are typically tightly controlled by a family.Typically,the accounting transparency of these firms is low,because founders base contracts with stakeholders on personal networks and inside communications.The loss of specialized assets in the process of inheritance led to narrowing the private information communication channels between enterprises and stakeholders,prompting enterprises to change the internal governance mode and the high quality accounting information as a supplementary mechanism.This passage analyzes founder succession on the perspective of governance differences,and summaries the domestic and foreign literature.It is based on the contract theory,asset specificity theory and asymmetric information theory,and aimed to study how accounting information quality changes before and after succession of entrepreneurial firms.Then the paper further studies how political relationship of founders and educational level of successors play a moderating role in founder succession and accounting information quality.Family firms of succession which listed on the Shanghai and Shenzhen stock exchange between 1997 and 2016 is the study sample of this passage.It establishes the corresponding model and gets the following contents and conclusions:(1)it studies how founder succession impacts accounting information quality,we found that accounting information quality of family firm changes better after succession events.It suggests that entrepreneurial firms shift to a less inside-based accounting system upon succession.(2)it studies the effect of the political association of the founder on the relationship between succession and accounting information quality.We proved that political relationship of founder plays a negative role in founder succession and accounting information quality.In other words,political relationship of founder will weaken the positive impact of succession on accounting information quality.(3)it studies the effect of the educational level of the successor on the relationship between succession and accounting information quality.We found that educational level of the successor plays a positive role in founder succession and accounting information quality.High educational level of the successor promotes the improvement of the quality of accounting information.Finally,this paper summarizes research conclusions,and put forward several suggestions about family founder succession and accounting information quality based on the theoretical and empirical analysis.Besides,the paper expounds the future research directions and shortcomings.