The Impact Of Conservatism To The Listed Company's Financial Fraud Behavior

In recent years,the status of neutral accounting has become increasingly prominent with the popularity of fair value measurement in the world,while the conservative accounting has been repeatedly excluded.The current debate on conservatism focus on whether the financial information based on conservative accounting policy is high-quality,and whether the high-quality accounting standards system should accommodate the principle of conservatism.Then we conducted the study on the influence of accounting conservatism on the financial fraud of listed companies.This paper firstly examine how the conservative accounting policies affect the quality of the company's financial information which measured by financial fraud.Then we explore how the managerial ownership affect the relationship between conservatism and financial fraud.At the same time,this paper introduces the free cash flow variables of enterprises and examines the changes of relationship between the conservatism and financial fraud when the companies facing the financial distress.The results suggest the improvement in conservatism can significantly inhibit the occurrence of financial fraud,and the increase in the proportion of managerial ownership can strengthen the role of conservatism to curb financial fraud.Accounting conservatism has less inhibitory effect on financial fraud in listed companies with more cash flow than listed companies facing financial distress.In summary,accounting practice is still inseparable from the conservative principle,and high-quality accounting standards system still need to retain conservatism.