The Research On The Impact Of Pyramid Ownership Structure Characteristics On Accounting Conservatism

Nowadays,with the deepening of the market economy,the capital market demand for high-quality accounting information is increasing,accounting conservatism as an important standard of the high-quality accounting information through timely recognition of economic losses can reduce business risk and protect the interests of investors better,then it receives more and more recognition and has become a hot topic in academia.So,what factors will affect the enterprise's accounting conservatism?For this problem,domestic and foreign scholars have done a more in-depth research from the perspective of debt contract or from the perspective of corporate governance,and have concluded that the ownership structure is an important factor affecting the accounting conservatism.The presence of the pyramid structure provides a new research direction,only when we trace back to the shareholders who ultimately control along the control chain can we further clarify the relationship between ownership structure and accounting conservatism.In our country,pyramid ownership structure is widespread and the second type of agency problem between ultimate controlling shareholder and minority shareholders is especially serious.Therefore,this paper based on the pyramid ownership structure,from the perspective of the ultimate controlling shareholder to study its characteristics' impact on accounting conservatism has a certain significance and value.Existing research literature focused on the study of the influence of the degree of separation of two rights on ultimate controlling shareholder behavior,while the internal complex control chain morphology of the pyramid ownership structure creates the conditions for the ultimate controlling shareholder to empty bottom listed companies and therefore the research of the ultimate controlling shareholder behavior should not be limited to the perspective of separation of ownership,but should be extended to the entire framework of the pyramid ownership structure.Ultimate control rights,cash flow rights,separation of ownership,the complexity of pyramid ownership structure and the nature of ultimate controlling shareholder are comprehensive characteristics of the pyramid ownership structure,so the perspective of studying ultimate controlling shareholder can be extended to above five dimensions so that we can achieve a comprehensive study of its effect on accounting conservatism.This paper combines theoretical analysis with empirical test and analyzes the influence of the structural characteristics of pyramid on accounting conservatism by using A-share listed companies held by pyramid ownership structure in 2012-2014 as sample data,based on C-SCORE model proposed by Khan and Watts(2007)to measure annual accounting conservatism level.The study finds that:(1)Accounting conservatism is widespread in listed companies in our country,and the accounting conservatism of the enterprise which ultimate controlling shareholder is of state-owned nature is higher than non-state-owned enterprises.(2)The ultimate control right and the accounting conservatism is U shape relationship(3)The higher the cash flow right of the ultimate controlling shareholder,the higher the accounting conservatism of the enterprise,and the cash flow right of the ultimate shareholders have incentive effect on the ultimate controlling shareholder..(4)The higher the degree of separation of two rights the lower the corporate accounting conservatism.(5)The more complex the pyramid ownership structure,the lower the level of accounting information conservatism.This paper contains the following six parts.The first chapter is introduction.which introduces the research background,research methods and framework and concludes possible innovations of this paper.The second chapter is review and commentary on relevant literature.This paper reviews the domestic and abroad researches about the influence of pyramid ownership structure and the influence factors and economic consequences of accounting conservatism,on this basis,this paper point out the view of this research.The third chapter is theoretical analysis and research hypothesis,this paper based on principal-agent theory,control theory and asymmetric information theory,analyze the relationship between the pyramid ownership structure and accounting conservatism in theory,and proposed five hypotheses of this paper from the perspective of the ultimate controlling shareholder.The fourth chapter is research design.We establish the research models,set other control variables,and describe the data source and the sample selection criteria in this part.The fifth chapter is the empirical analysis and results.This paper take multiple linear regression method to study the effects of various aspect of the pyramid ownership structure on accounting conservatism,based on the existence of accounting conservatism and finally is the robustness.The sixth chapter is the conclusions and policy suggestions.According to the results of the analysis we summarize the main conclusions of this paper and give suggestions from the corporate,government and other angles.This paper explores actively in the following three areas.Firstly,this paper selects the relatively new angle.In recent years,scholars focuses on the problem of accounting conservatism increasingly but few scholars from the perspective of the ultimate controlling shareholder to study at present and the study is concentrated on business performance,value and other.Therefore,this paper relates it to accounting conservatism can fill the gap.Secondly,this paper further subdivides the characteristics of the pyramid ownership structure to investigate of the impact of the various aspects of the pyramid ownership structure on accounting conservatism from the five dimensions and broadens the scope of previous studies,finding that the relationship between the ultimate control right and accounting conservatism is of complex U-shaped relationship.Thirdly,on the basis of previous studies,this paper concludes that it can be obtained by optimizing the pyramid structure and strengthening the supervision of the ultimate controlling shareholder to improve the accounting conservatism on the basis of previous studies and provides effective evidence for the healthy development of enterprise and market.