Product Market Competition,Internal Control And Accounting Conservatism

With the increasing complexity of the market economy,there is a large uncertainty in the market,and the possibility of mistakes in investment decisions by external investors is increasing.The quality of accounting information of enterprises is especially important for stakeholders.As an important criterion for the quality of accounting information,accounting conservatism is the principle that must be observed in the preparation of financial statements.It plays an important role in protecting the interests of investors,controlling the risk of information distortion and regulating corporate behavior.The current academic research on accounting conservatism focuses on four aspects of contract,legal proceedings,regulation and taxation.In recent years,scholars have continued to study the impact of external environmental factors on accounting conservatism.In the presence of the market,there must be competition.The fierce market competition will weaken the degree of information asymmetry between enterprises and provide leverage and standards for performance among enterprises,which will lead to more active business policies and financial strategies.Therefore,the level of accounting conservatism is a selective expression indicator for enterprises to face different levels of product market competition.The effect of external product market competition on accounting conservatism will be affected by the quality of internal control.Internal control can help enterprises to self-adjust,constrain,plan,control,etc.,and have a positive effect on corporate accounting conservatism.Therefore,the relationship between product market competition,internal control quality and accounting conservatism is of great significance to enterprises and society.Accounting conservatism will be affected by both the external market environment and internal factors of the enterprise.In the study of the relationship between the three,this paper uses theoretical research and empirical analysis methods to take the 2013-2017 ShanghaiShenzhen A-share main board listed company as a sample,and divide the product market competition into two dimensions: industry competition and competitive position.Using HHI,Lerner index and Basu model measure the industry competition,competitive position and accounting conservatism,respectively,and explore the impact on accounting conservatism.On this basis,the internal control quality is divided into high internal control and low internal control.The internal control quality is divided into two groups: high internal control and low internal control.The influence of internal control on product market competition and accounting conservatism is discussed.The research results show that the industry competition and competitive position are positively correlated with accounting conservatism,that is,product market competition can improve accounting conservatism.After further distinguishing between the high internal control group and the low internal control group,the results show that the positive correlation between the market competition of the high internal control group and the accounting conservatism is more significant.Therefore,the internal control will enhance the improvement of the accounting stability of the product market.