دانلود رایگان مقاله انگلیسی اصلاحات حسابداری و محافظه کاری در درآمد: شرکت های لیست شده چین - الزویر 2018

ABSTRACT

We examine the effects of the two major accounting reforms of 2001 and 2007 in China on conservatism in earnings using a variety of measures to ascertain the existence of conservatism and to gauge its degree. Our results provide evidence of different levels of conservatism in financial reporting in China during the period under investigation. We suggest that conservatism has generally existed in financial reporting in China since the 1998 accounting reform. However, the effects of the two accounting reforms on conservatism in earnings vary. Specifically, the 2001 accounting reforms significantly improved conservatism in earnings whereas the 2007 reforms reduced the extent of conservatism in earnings. We also note that conservatism in earnings rebounded following the 2007–09 global financial crisis. Furthermore, the 2001 accounting reforms have a greater positive impact on conservatism in earnings in regions with a lower level of legal protection for investors whereas the negative impact of the 2007 accounting reforms on conservatism in earnings is not affected by the level of legal protection for investors. These results suggest that accounting reforms that restrict managers’ abilities to conduct earnings management and improve conservatism in earnings serve as an important substitute mechanism for institutions of investor protection. Our findings provide useful insights into accounting conservatism and have important theoretical and practical implications for accounting regulators, investors, and researchers.

5. Discussion and conclusions

We provide empirical evidence on the impact of accounting convergence with IFRS in a major emerging economy. In particular, we examined the effects of two major accounting reforms in China on conservatism in earnings using a sample of Chinese A-share listed companies from 1998 to 2013. Our results indicate that the earnings of Chinese companies generally displayed conservatism for the period between 1998 and 2013. The accounting reforms of 2001 increased conservatism in earnings, while the 2007 accounting standards weakened conservatism in earnings. We also note that conservatism in earnings rebounded following the 2007–09 global financial crisis, which is likely attributable to managers refraining from using fair value in accounting given the public scrutiny after the global financial crisis. Furthermore, the results indicate that the effects of accounting reforms on conservatism vary across regions with varying levels of legal protection for investors. The 2001 accounting reforms have a greater positive impact on conservatism in earnings in regions with a lower level of legal protection for investors whereas the negative impact of the 2007 accounting reforms on conservatism in earnings is not affected by the level of legal protection for investors. These results suggest that accounting reforms that restrict the ability of managers to conduct earnings management and improve conservatism in earnings serve as an important substitute mechanism for institutions of investor protection.