Institutional Investors,Marketization Degree And Accounting Conservatism

Accounting conservatism,also known as prudence,is not only one of the general principles of Chinese Accounting Standards,but also an important factor affecting the quality of accounting information.Although accounting conservatism has been widely applied in practice,it has also been controversial that it is conflict with reliability and relevance in some cases.The application of accounting conservatism should be based on improving the quality of accounting information,taking accounting target as the foothold,on the basis of prudent estimation,exerting its great role in improving corporate governance and reducing information asymmetry among the stakeholders.In addition,with the development of Chinese market economy,the number and scale of institutional investors are expanding.They not only play an important role in capital market,but also play a prominent role in corporate governance.With the growth of institutional investors and national policy support,it is necessary to study the impact of institutional investor on accounting conservatism.In the process of marketization reform in China,the phenomenon of uneven regional development is becoming more and more prominent.The degree of marketization in the eastern coastal areas is obviously higher than that in the central and western regions.The degree of marketization is a measure of the external environment of the listed company,and to a certain extent,it also affects the accounting conservatism.Therefore,under the above background,it is undoubtedly of great significance to study the relationship between the institutional investor,the degree of marketization and the accounting conservatism.Based on the review of related academic research,the principal-agent theory and efficient market theory,this paper analyses the influence of the internal institutional investors and the external regional marketization on the accounting conservatism,and then combine these two factors to study the comprehensive effect on accounting conservatism.Based on the Shanghai and Shenzhen stock markets listed companies in China,we removed the financial industry and screened related samples.Based on the accrued cash flow model,we extended the hypothesis to verify the correctness of the hypothesis.According to the research results in this paper,firstly,there are accounting conservatism in Chinese listed companies;secondly,from the perspective of internal ownership structure,institutional investors can significantly improve the accounting conservatism of listed companies;then,from the external environment analysis,accounting conservatism of listed companies are stronger in the areas with higher marketization degree;finally,take the internal and external factors into account at the same time,this paper proves that in the areas with higher marketization degree,it is more significant positive correlation between the institutional investors and accounting conservatism,but not in the areas with lower marketization degree.The biggest innovation of this paper is to study accounting conservatism from two angles: inside and outside the listed company,and adopt the external angle of "marketization" to study the influence of external environment on accounting conservatism innovatively.This paper expands the research results in the field of accounting conservatism,and has important theoretical and practical significance for deepening the market reform and expanding institutional investors in China.