Pyramid Structure And Accounting Robustness

In recent years,with the global expansion of the financial crisis,the financial scandals of listed companies has been constantly exposed,the quality of accounting information is not optimistic,conservatism accounting principles have attracted more and more attention and become the focus of research.The principle of accounting robustness helps to purify the securities market to a certain extent and enhance the credibility of the financial information of listed companies.The status and position of company stakeholders are determined by the structure of control rights.The controlling shareholder plays a dominant role in the game information supply game.In particular,the ultimate controlling shareholder can control the information source and facilitate the implementation of accounting information manipulation through the holding structure,in order to meet the needs of their own economic interests.The capital market in China is an emerging market economy transition,generally there is the structure of ownership concentration,in which case it is the ultimate controlling shareholder who controls company,and tend to use the way such as pyramid shareholding structure to realize the separation of cash flow rights and control.The existence of the ultimate ownership structure provides a new perspective for the study of accounting robustness.The level of control holding by the ultimate controlling shareholder determines its implementation and influence.The number of layer and chain determines the vertical and horizontal dimensions of the pyramid structure.It is the core of the pyramid structure and the enterprise groups,the complexity of the pyramid structure reflects the internal structure of the pyramid constitute.Only along the control chain will be traced back to the ultimate control of shareholders to further clarify the relationship between equity structure and accounting conservatism.In this paper,based on the characteristics of the ultimate controlling shareholder(control)and the characteristics of the pyramid ownership structure(pyramid layer and structural complexity)as the starting point,at the same time,on the basis of subdivision nature of property rights of ultimate controlling shareholders,we will adopt revised accrual-cash flow method(Ball,2005)by Xia Donglin and Zhu Song(2009)and negative cumulative accrual method to study the impact of pyramid structure on accounting conservatism.The study found that the accounting conservatism in the company whose ultimate control shareholder is in the nature of the government(state-owned nature)is higher than the private control(private nature)of the company,and the accounting conservatism in the company controlled by the central government is higher than the company controlled by the local government.control,Due to the "double-face" features of ownership,The relationship between control and accounting conservatism has obvious interval effects.At the low control level,the control right is negatively correlated with the conservatism.When the level of control is high,the control right is positively correlated with the accounting conservatism.Pyramid layer and structural complexity are significantly negatively correlated with accounting conservatism.