Can External Environmental Uncertainty Influence Corporate Accrued Items

Under the accrual basis,The accrual project is not only an important part of the balance sheet,but also an important factor affecting the income statement.At home and abroad,a lot of literature have proved that the level of accrued items has important implications for investment decision.As an important part of enterprise surplus,from a certain extent,the quality of the accrued items reflect the value of enterprise's investment,and also provides the important information of investment risk and return in the future to investors.But in recent years,people's perception for accrued items are more concentrated in the aspect of manipulation of the profits as part of the earnings management of the enterprise,ignoring the role of investment in working capital on behalf of the enterprise.In recent years,domestic and foreign scholars on the accrual project research more focused on earnings management,that the accrual project is manipulable,it is unpredictable.However,the accrual project is an important component of the enterprise's working capital,in addition to the important part of the enterprise's accounting surplus,and its scale change can reflect the investment capital investment to a certain extent,Under the framework of real option theory,the uncertainty of external environment faced by enterprises is closely related to its investment decision.Enterprises will base on external environmental uncertainty to decide whether to delay investment,so that environmental uncertainty on corporate investment has a certain role in the forecast.If the accrual item is also considered as an investment behavior(working capital investment),then environmental uncertainty may also have an impact on the business accruals.The study of this problem can not only provide a new way for the academic community to understand the determinants of the accruals,but also to provide a richer research for the current academic research on the economic consequences of environmental uncertainties.Based on this,this paper draw on research ideas from Arif(2016),and this will be the first time in the domestic to use accrual projects as the corporate working capital investment.Based on the framework of real options,we study the relationship between external environmental uncertainty and corporate accruals and the economic principles behind it.What more,through the classification of boundary conditions,we study the different impact between external environmental uncertainty and corporate accruals.In particular,this paper first analyzes the economic principle and boundary condition of the enterprise accrual project based on the real option theory,and puts forward the theoretical hypothesis to be tested on the basis of the real option theory.Then,based on the existing research,two kinds of indicators are used to measure the uncertainty of the external environment faced by the enterprise:one is the annual uncertainties of the listed companies' stocks based on the GARCH model,Second,learn from the commonly used measurement method of domestic research,the use of the industry to eliminate the five years of abnormal sales of the standard deviation of the standard to represent the enterprise facing environmental uncertainty.Based on this,the conclusions of this paper include:(1)There is a significant negative correlation between environmental uncertainty and accrual items,and this negative correlation exists both at the enterprise and industry levels.This is mainly because the rise in environmental uncertainty exacerbates the risk of the firm's choice of current investment and increases the value(option value)of its choice to continue.In order to avoid investment losses,companies will choose to delay investment,waiting for the external environment is more clear when the investment.(2)The negative correlation between environmental uncertainty and accrual items is more pronounced in companies that are in financial crisis.This is mainly because the "risk transfer" theory.When enterprises in a financial crisis get into the investment,the investment income is enjoyed by the shareholders,while the investment risk is borne by the creditors.When the enterprise get into a financial crisis,its decision-making power is transfered from the shareholders(the board)to the creditors.Reasonable creditors in order to avoid the risk of investment,will choose to let the leading enterprises in the environmental uncertainty rise as much as possible to reduce investment to ensure that the debt principal and interest security.(3)The negative correlation between environmental uncertainty and accrual items is more pronounced in firms with shorter operating cycles.This may be due to the fact that firms with longer business cycles are unable to flexibly adjust to sudden increases in environmental uncertainty,under pressure from market(investors,securities analysts),which may be uncertain in the environment Positive earnings management,thereby undermining the negative correlation between environmental uncertainty and accrued items.(4)The environmental uncertainty is not only negatively related to the assets(inventory and receivables)of the accrual items,but there is no significant relationship with the liabilities(accrued items)of the accruals.This is mainly because the changes in corporate investment are more directly reflected in its assets.Correspondingly,changes in corporate working capital investment should also be more directly reflected in the assets of accrual items,which makes the impact of environmental uncertainty on the assets of the enterprise accruals more obvious.