Empirical Research On Motivation Of Accounting Conservatism

Accounting conservatism is an important convention of financial report. It has even been recognized as one of accounting information quality characteristics in China. In other words, conservatism is playing an important role in practice as well as in drafting principles. In2006, the Ministry of Finance issued the new accounting standards which made a large number of amendments vs. the original criteria, and achieved a convergence with the international accounting standards. In2008, the outbreak of the global financial crisis causes the accounting field reflects on how to improve the quality of accounting information. Therefore, it is very necessary to study one of the measurements of the accounting information qualities——accounting conservatism in this paper.Based on this background, the article selected all A-share listed company data of Shanghai Stock Exchange and Shenzhen Stock Exchange in2006～2007and2008～2010as the study sample, adopted Basu Model to study2problems as follows:1. Under the background of the financial crisis, the existence of accounting conservatism in China2. The motivation of accounting conservatism including accounting principles, contracts, earning and tax.The major empirical results in the article are listed as follows:1. Accounting conservatism existed in the year2006-2007and2008-2010. After the implementation of the new accounting standards, the conservatism of accounting earnings reduced and the "true and fair" of accounting information has been improved.2. Debt contracts and executives’ salary contracts have impact on the accounting conservatism of Chinese listed companies, and both of the contracts increase the conservatism of listed companies.3. Ownership concentration and shareholding structure have impact on the accounting conservatism of Chinese listed companies. The higher the ownership concentration is, the lower is the conservatism of accounting earnings of listed companies. When the first shareholder is the state-owned shares, the higher the proportion of state-owned shares is, the lower is the conservatism of accounting earnings.4. As a form of government intervention, the level of enterprise income tax make a negative effect on the conservatism of accounting earnings of listed companies.