Accounting Conservatism,Economic Boom And Enterprise Value

With the continuous development of the economy and the continuous expansion of the company's scale,corporate management and related stakeholders are paying more and more attention to corporate value.Corporate value represents the sustainability of corporate profits,the long-term interests of all stakeholders,and the long-term,stable development of the company.In more and more frequent commercial trade activities,all interested parties,both academics and corporate interests,are increasingly pursuing the maximization of corporate value.Since all contractual parties of an enterprise want the enterprise to realize the maximization of value,this is beneficial to the convergence of the interests of various contractors.It can reduce the conflicts of interest of various contractors,reduce the corresponding costs,and can reduce the financial risk and time cost of the enterprise,can promote the long-term development of corporate health.As an important principle of accounting,accounting conservatism is closely watched by scholars and contractors of enterprises.Accounting conservatism can protect the interests of various contractors.It has an important guiding role for corporate stakeholders and has a positive effect on corporate value.However,one-sided emphasis on accounting conservatism will lead to the contradiction of the authenticity and reliability of accounting information quality,reduce the decision-making effectiveness which is based on accounting information,thereby reducing the value of the company.This is because accounting conservatism is divided into conditional accounting conservatism and non-conditional accounting conservatism.Confusion over these two types of accounting conservatism leads to controversial accounting conservatism and is not conducive to enhancing corporate value.Firstly,this paper conducts relevant theoretical analysis on two kinds of accounting conservatism,economic prosperity and corporate value,and draws theoretical hypotheses.Then perform regression analysis on the sample data of listed companies.This article takes a listed company from Shanghai stock market A shares from 2010 to2016 as a sample,the company value is measured using Tobin's Q value,and the macroeconomic environment index is used to quantify the macroeconomic environment.First,two types of accounting conservatism of listed companies in China are measured.Then,this paper examined the relationship between the two types of accounting conservatism and firm value,and then examined the relationship among the two types of accounting conservatism,economic prosperity,and firm value.The study found that:(1)China's listed companies generally have conditional accounting conservatism,but the non-conditional accounting conservatism is poor,which is mainly due to China's accounting policies,regulations and tax regulations.(2)The study found that the relationship between conditional accounting conservatism and corporate value is positively correlated,while non-conditional accounting conservatism is negatively correlated with corporate value.This shows that the higher conditional accounting conservatism helps to enhance the value of the company,while the lower non-conditional accounting conservatism is conducive to increasing the value of the company.(3)Economic prosperity will enhance the influence of non-conditional accounting conservatism on firm value,but it will weaken the influence of conditional accounting conservatism on firm value.Based on the research results,this paper,combined with China's accounting standards and the formulation of laws and regulations,suggests that Chinese scholars,law-makers and listed companies must fully understand accounting conservatism and reasonably apply accounting conservatism,in addition to different economic conditions.The use of appropriate principles of accounting conservatism will help increase corporate value.