Empirical Study On Equity Incentive Effect From The Perspective Of Accounting Conservatism

Although the implementation of equity incentive has been recognized in promoting the management of hard work,enhancing the value of enterprises and promoting economic growth,but it may also have some negative effects,such as the management of earnings management,manipulation of information disclosure and the timing of the announcement of the program.Therefore,there are "interest convergence effect" and "management entrenchment effect".So,the equity incentive is the promotion or inhibition,which is the n eed for further study.This paper takes the Shanghai and Shenzhen A shares of listed companies which have announced equity incentive program from 2008 to 2014 as research samples,using multiple linear regression analysis and paired sample T test method,Studying the effect of equity incentive on Chinese enterprises from the perspective of accounting conservatism.The study found:Equity incentive has "management entrenchment effect".In order to reduce the exercise price and the annual performance evaluation standards,Managements choose to adopt more conservative accounting policies before the announcement;Meanwhile,in order to increase stock price and increase the annual performance appraisal,Managements choose to take a more aggressive accounting policy in the days after the announcement.In addition,the company which implements stock options' "negative effect" is stronger than the company which implements restricted stock.Finally,in the process of implementing equity incentive,Management uses the accounting conservatism to carry out the downward and upward earnings management,accounting conservatism is an important means and tools of earnings management.From the perspective of accounting conservatism,this paper analyzes the impact of the implementation of equity incentive on Corporate Governance,and reveals the current problems existing in the implementation of equity incentive system.From the revision of equity incentive management approach,the improvement of the corporate governance structure and the regulatory oversight,we put forward to improve listed company information supervision and equity incentive plan policy recommendations.