Managerial Power,Accounting Conservatism And Stock Price Crash Risk

China's capital market started relatively late.Since the global financial crisis in 2008,China's capital market is still in the process of ups and downs.The instantaneous alternation of bull market and bear market not only damages our investors seriously,but also seriously affects the development process of capital market and reduces the efficiency of resource allocation.In recent years,the phenomenon of stock price crash at the enterprise level emerges in endlessly,which will not only have a negative impact on the development of listed companies themselves,but also cause heavy losses to a large number of investors,and even have a negative impact on the whole industry and even the capital market.Therefore,in recent years,the risk of stock price crash at the corporate level has gradually attracted the attention of academia and practitioners.Based on the research of Jin and Meyers(2006),the academia have established the "information hiding hypothesis" to explain the risk of stock price crash.That is,under the background of principal-agent,in order to maximize their own interests,managers propable use their power to hide the negative information of enterprises,which results in the asymmetry of internal and external information of enterprises.Price of stock will crash sharply when the negative information accumulates to the limit that enterprises can bear.Because of the instability of the capital market,the role of accounting conservatism is also controversial.Accounting conservatism means that it is more timely to confirm "bad news" than "good news",and it has more stringent requirements to confirm "good news" such as earnings.Conservative accounting policy reduces the space and motivation of managements' information hiding.Therefore,starting from the corporate level under the background of principal-agent,this paper studies the relationship between managerial power,accounting conservatism and stock price crash risk.It has certain theoretical and practical significance to improve the internal power allocation,the implementation of accounting policy and the healthy development of capital market.This paper takes non-financial companies in Shanghai and Shenzhen A-share from 2009 to 2017 as the research sample,after excluding ST enterprises,insolvent enterprises,weekly returns less than 30 observations in a year and missing data.Finally,5972 samples were obtained.After testing the multivariate linear regression model,the following conclusions were drawn:(1)There is a significant negative correlation between managerial power and accounting conservatism,that is,the greater the managerial power,the lower the accounting conservatism.(2)There is a significant positive correlation between managerial power and the stock price crash risk;The study finds that correlation in state-owned enterprises is more significant than that in private enterprises;In the cycle phase,the relationship is more significant in the mature and declining stages than that in the growth period.(3)Conservative accounting policy means that compared with the confirmation of "good news" such as earnings,the confirmation of "bad news" such as losses is more timely,and the space for hiding negative news is reduced.Therefore,accounting conservatism effectively reduces the risk of stock price crash.(4)Accounting conservatism bears some of the mediating effects of the relationship between managerial power and stock price crash risk.