Research On The Relationship Between Institutional Investors' Shareholding And Accounting Conservatism

Since China ' s emphasis on the securities market to over-regulate institutional investors,institutional investors have developed rapidly in the next decade or so.As an important part of the company's external governance,the increase in the size of institutional investors'shareholding will affect the financial reporting quality of listed companies to a certain extent.High-quality financial reports emphasize the application of the principle of accounting conservatism.The sound accounting information in financial reporting contributes to the reduction of information asymmetry and the improvement of corporate governance,and thus plays its role in protecting investors.Therefore,this paper explores the relationship between institutional investor holdings and accounting conservatism as the starting point of this paper.As an important governance mechanism of the company,internal control runs through the whole process of corporate governance,which largely determines the quality of corporate governance.Institutional investors who are external governance mechanisms have the motivation and ability to participate in corporate governance,which will inevitably have a greater impact on internal control and make the management of listed companies more effective,However,internal control can not only be influenced by institutional investors,but internal control as a monitoring mechanism for accounting information quality also affects accounting conservatism.Therefore,whether the internal control has the intermediary role in the relationship between institutional investors' shareholding and accounting conservatism is the core of this paper,so as to carry out the research on the whole paper.This paper selects the 2013-2016 Shanghai-Shenzhen A-share main board listed company as the research object,and adopts the combination of empirical research and normative research to carry out the research of this paper.After screening,a total of 3877 observations are obtained.This paper firstly analyzes the influence of institutional investors' shareholding on accounting conservatism and the influence of institutional investors' shareholding on internal control.On this basis,the intermediary effect theory is introduced to further study the intermediary role of internal control in the relationship between institutional investors' shareholding and accounting stability.After theoretical analysis and empirical research,the following conclusions are drawn:institutional investors' shareholdings are positively correlated with accounting conservatism.Further classification of institutional investors reveals that independent institutional investors can positively promote the improvement of accounting conservatism,instead of non-independent institutional investors' shareholdings have no significant impact on accounting conservatism;secondly,it is verified that institutional investors' shareholdings can positively promote the improvement of internal control quality,after further classifying institutional investors,it is concluded that independent institutional investors have a significant positive correlation with internal control,while non-independent institutional investors have no significant impact on internal control.Finally,it is verified that internal control has a partial intermediary role between institutional investors' shareholding and accounting conservatism.After classifying institutional investors,internal control has a partial intermediary effect between independent institutional investors' shareholding and accounting conservatism,while there is no mediating effect in the relationship between non-independent institutional investors'shareholding and accounting conservatism.The research conclusions can not only provide theoretical reference for relevant policies,but also have certain practical significance for strengthening the supervision of institutional investors and emphasizing the importance of accounting conservatism.