Research On The Relationship Between Manangrial Overconfidence,Institutional Investor's Shareholding And Accounting Conservatism

With the instantly improvement of China's capital market,the requirements of stakeholders on the quality of corporate accounting information are constantly enhanced.After the reform of the accounting system,the supervision of the securities market and the gradual improvement of the punishment system,the accounting information of enterprises has been steadily improved.If an enterprise maintains a good level of accounting conservatism,it can accurately reflect its real financial situation,operating results and cash flow through accounting information,so that the shareholders,creditors,regulators and other stakeholders in our society can obtain accurate information and make rational and effective decisions.Therefore,the improvement of accounting conservatism has both theoretical significance and practical value.In order to study accounting conservatism further,domestic and foreign scholars began to pay attention to the impact of management's irrational psychology on accounting conservatism.On the one hand,with the continuous expansion of the company scale and the rapid change of the economic environment,the operation,management and decision-making issues of the enterprise are increasing day by day,and the managers may show excessive confidence to choose accounting policies for the purpose of pursuing their own utility maximization and better working environment.On the other hand,according to the existing accounting standards in China,the management can use more professional judgment and subjective decision-making in the daily business decisions of enterprises.The overconfidence of the management may bring certain impact on the business decisions,investment and financing of enterprises,so as to reduce the level of accounting conservatism.In recent years,corporate external regulators have gradually developed in the society,which effectively restricts and supervises the irrational behaviors of the management.From an objective perspective,with the continuous growth of the capital scale,their status and discourse power in the capital market and listed companies have also been significantly improved.These mature and rational investors have had an important impact on corporate decision-making and governance.At the same time,from a subjective point of view,institutional investors will face liquidity risks when withdrawing from trading due to their large holdings.In order to avoid damage to their own interests,institutional investors will be encouraged to hold stocks for a long time and pay attention to the long-term development of enterprises in the future.Therefore,institutional investors,as direct stakeholders,have a strong economic motivation to supervise the behavior of the company's management,effectively improving the robustness of the enterprise.Therefore,it is one of the main issues in this paper that institutional investors influence corporate accounting robustness through participating in corporate governance.Based on the data of A-share listed companies in Shanghai and Shenzhen from 2008 to 2017,the paper finds that:(1)management overconfidence has an inhibitory effect on accounting conservatism;(2)institutional investors' shareholding can promote accounting conservatism;(3)institutional investor ownership will weaken the inhibitory effect of management overconfidence on accounting conservatism.The paper mainly includes the following six parts:The first part is the introduction.This part maiuly introduces the research background,significance of this paper and makes an overall explanation.The second part is literature review.This part summarizes and sorts out the domestic and foreign research achievements,and reviews the existing research achievements in literature,based on which the research viewpoints of this paper are further put forward.The third part is theoretical analysis and research hypothesis.This part first defines the concepts of management overconfidence,institutional investors and accounting robustness,and puts forward the research hypothesis of this paper by introducing relevant theories,so as to provide ideas for the following research.The fourth part is research design.This part selects research elements to form research samples,and carries out variable definition and model design.The fifth part is empirical analysis.In this part,descriptive statistical analysis and correlation test are carried out on the samples successively.The above-mentioned variables and three models are used for empirical test analysis and robustness test.The sixth part is research conclusions and suggestions.This part summarizes the research conclusions,and puts forward valuable countermeasures and Suggestions,points out the shortcomings of this paper,and looks forward to the future.This paper makes further innovations in the research design and content.Basd on the existing research results,this paper put the management overconfidence,institutional investors and accounting conservatism into a same empirical model,studying how the institutional investors,a kind of external governance mechanism,effect the improvement of corporate governance and the accounting conservatism;furthermore,the paper investigates the quality and conservatism of accounting information from the perspectives of internal and external environment,comprehensively considering the impact on accounting conseratism.