This paper considers the influence of corporate strategic positioning on the firm’s accounting conservatism from the perspective of a company’s deviation from the industry’s conventional strategy, and selects China’s A stock market company as an initial research sample for empirical analysis from 2000 to 2016. Research shows that the greater the company’s strategic differences, the lower the accounting conservatism. Further studies have found that the negative correlation between corporate strategic differences and accounting conservatism is even more pronounced in private enterprises. In addition, from the perspective of the intensity of industry rules, this paper compares the degree of strategic deviance between state-owned enterprises and private enterprises, the results show that state-owned enterprises are subject to stronger constraints and the degree of strategic differences will be lower. This article focuses on the perspective of corporate strategic deviance and examines the role of non-accounting information in corporate accounting practices, and compares the strategic differences between state-owned enterprises and private enterprises from the perspective of the strength of industry constraints, which provides an effective means for the company’s external stakeholders, including creditors and investors, to use the company’s strategic information, and enriches the research on the reform of China’s property rights system.
KeywordsStrategic DevianceAccounting ConservatismProperty Right
Meyer, J.W. and Rowan, B. (1977) Institutionalized Organizations: Formal Structure as Myth and Ceremony. American Journal of Sociology, 83, 340-363. https://doi.org/10.1086/226550
Carpenter, M.A. (2000) The Price of Change: The Role of CEO Compensation in Strategic Variation and Deviation from Industry Strategy Norms. Journal of Management, 26, 1179-1198. https://doi.org/10.1177/014920630002600606
Thompson, J.D. (1967) Organizations in Action: Social Science Bases of Administrative Theory. Transaction Publishers, Piscataway, New Jersey.
Walton, R.E. and Dutton, J.M. (1969) The Management of Interdepartmental Conflict: A Model and Review. Administrative Science Quarterly, 14, 73-84. https://doi.org/10.2307/2391364
Geletkanycz, M.A. and Hambrick, D.C. (1997) The External Ties of Top Executives: Implications for Strategic Choice and Performance. Administrative Science Quarterly, 42, 654-681. https://doi.org/10.2307/2393653
Deephouse, D.L. (1999) To Be Different, or to Be the Same? It’s a Question (and Theory) of Strategic Balance. Strategic Management Journal, 20, 147-166. https://doi.org/10.1002/(SICI)1097-0266(199902)20:2 3.0.CO;2-Q
Cannon, W.B., McIver, M.A. and Bliss, S.W. (1924) Studies on the Conditions of Activity in Endocrine Glands: XIII. A Sympathetic and Adrenal Mechanism for Mobilizing Sugar in Hypoglycemia. American Journal of Physiology-Legacy Content, 69, 46-66. https://doi.org/10.1152/ajplegacy.1924.69.1.46
Beaver, W.H. and Ryan, S.G. (2005) Conditional and Unconditional Conservatism: Concepts and Modeling. Review of Accounting Studies, 10, 269-309. https://doi.org/10.1007/s11142-005-1532-6
Basu, S. (1997) The Conservatism Principle and the Asymmetric Timeliness of Earnings1. Journal of Accounting and Economics, 24, 3-37. https://doi.org/10.1016/S0165-4101(97)00014-1
Li, Z.Q. and Lu, W.B. (2003) The Robustness of Accounting Earnings: Discovery and Implications. Accounting Research, 2, 19-27.
Ball, R. and Shivakumar, L. (2005) Earnings Quality in UK Private Firms: Comparative Loss Recognition Timeliness. Journal of Accounting and Economics, 39, 83-128. https://doi.org/10.1016/j.jacceco.2004.04.001
Hiller, N.J. and Hambrick, D.C. (2005) Conceptualizing Executive Hubris: The Role of (hyper-) Core Self-Evaluations in Strategic Decision-Making. Strategic Management Journal, 26, 297-319. https://doi.org/10.1002/smj.455
Tang, J., Crossan, M. and Rowe, W.G. (2011) Dominant CEO, Deviant Strategy, and Extreme Performance: The Moderating Role of a Powerful Board. Journal of Management Studies, 48, 1479-1503. https://doi.org/10.1111/j.1467-6486.2010.00985.x
Zhao, F., Wang, T.N. and Zhang, L. (2012) Empirical Research on the Effect of Diversification Strategy on Firm Performance. China Soft Science, 11, 111-122.
Chen, S., Xiao, X.X., Yang, Y. and Zou, C. (2014) CEO Power, Strategic Differences and Firm Performance: A Regulatory Effect Based on Environmental Dynamics. Research in Finance and Trade, 25, 7-16.
Lei, H., Wang, Y.N., Nie, S.S. and Ouyang, L.P. (2015). Research on Time Lag Effect of Competitive Strategy Performance Based on Financial Performance Composite Index. Accounting Research, 5, 64-71.
Ye, K.T., Zhang, H. and Zhang, Y.X. (2014) Value Correlation between Corporate Strategy Differences and Accounting Information. Accounting Research, 5, 44-51.
Ma, X.M. (2015) Corporate Strategic Differences, Information Disclosure Quality and Accounting Information Value Relevance. Doctoral Dissertation, Zhejiang Gongshang University.
Ye, K.T., Dong, X.Y. and Cui, Y.J. (2015) Corporate Strategic Positioning and Accounting Earnings Management Behavior Selection. Accounting Research, 2015, 23-29.
Liu X. ,et al. (2016)Does the Type of Firm’s Strategy Affect the Characteristics of Earnings? A Survey of the Perspective of Accounting Conservatism Nankai Business Review 19, 111-121.
Watts, R.L. (1993) A Proposal for Research on Conservatism.
Watts, R.L. (2003) Conservatism in Accounting Part I: Explanations and Implications. Accounting Horizons, 17, 207-221. https://doi.org/10.2308/acch.2003.17.3.207
Ahmed, A.S., Billings, B.K., Morton, R.M. and Stanford-Harris, M. (2002) The Role of Accounting Conservatism in Mitigating Bondholder-Shareholder Conflicts over Dividend Policy and in Reducing Debt Costs. The Accounting Review, 77, 867-890. https://doi.org/10.2308/accr.2002.77.4.867
Nikolaev, V.V. (2010) Debt Covenants and Accounting Conservatism. Journal of Accounting Research, 48, 51-89. https://doi.org/10.1111/j.1475-679X.2009.00359.x
Liu, F.W. and Wang, Y. (2006) Empirical Study of the Influence of Corporate Governance Mechanisms on Accounting Conservatism. Journal of Shanghai Lixin University of Commerce, 20, 16-22.
Chen, X.D. and Huang, D.S. (2007) Corporate Governance and Accounting Conservatism: Empirical Research Based on Listed Companies. Securities Market Report, 3, 10-17.
Liu, Y.G., Wu, X.M. and Jiang, T. (2010) Nature of Property Rights, Debt Financing and Accounting Conservatism: Empirical Evidence from Chinese Listed Companies. Accounting Research, 1, 43-50.
LaFond, R. (2005) The Influence of Ownership Structure on Earnings Conservatism and the Informativeness of Stock Prices: An International Comparison. Sloan School of Management. Working Paper.
Cao, Y., Li, L. and Sun, J. (2005) Empirical Study of the Influence of Corporate Control on the Soundness of Accounting Earnings. Economic Management, 14, 34-42.
Fang, H.X. and Zhang, Z.P. (2012) Internal Control Quality and Accounting Conservatism: Evidence from the 2007-2010 Annual Report of Shenzhen A Share Company. Auditing and Economic Research, 5.
Ahmed, A.S. and Duellman, S. (2007) Accounting Conservatism and Board of Director Characteristics: An Empirical Analysis. Journal of Accounting and Economics, 43, 411-437. https://doi.org/10.1016/j.jacceco.2007.01.005
LaFond, R. and Watts, R.L. (2008) The Information Role of Conservatism. The Accounting Review, 83, 447-478. https://doi.org/10.2308/accr.2008.83.2.447
Zhang, Z.G., Liu, Y.L. and Tan, D.J. (2011) Managerial Background Characteristics and Accounting Conservatism: Empirical Evidence from Chinese Listed Companies. Accounting Research, 7, 11-18.
Ahmed, A.S. and Duellman, S. (2013) Managerial Overconfidence and Accounting Conservatism. Journal of Accounting Research, 51, 1-30. https://doi.org/10.1111/j.1475-679X.2012.00467.x
Sun, G.G. and Zhao, J.Y. (2014) The Nature of Property Rights Differences, Management Overconfidence and Accounting Conservatism. Accounting Research, 5, 52-58.
Shen, Y.J., Liang, S.K. and Chen, D.H. (2013) Employee Compensation and Accounting Conservatism-Based on Empirical Evidence from Chinese Listed Companies. Accounting Research, 4, 73-80.
Kellogg, R.L. (1984) Accounting Activities, Security Prices, and Class Action Lawsuits. Journal of Accounting and Economics, 6, 185-204. https://doi.org/10.1016/0165-4101(84)90024-7
Ball, R., Robin, A. and Wu, J.S. (2003) Incentives versus Standards: Properties of Accounting Income in Four East Asian Countries. Journal of Accounting and Economics, 36, 235-270. https://doi.org/10.1016/j.jacceco.2003.10.003
Zhou, Z.J. and Du, X.Q. (2012) Tax Burden, Accounting Conservatism and Compensation Performance Sensitivity. Financial Research, 10, 167-179.
Che F. ,et al. (2012)Income Tax Reform, Accounting-Tax Differences and Accounting Conservatism Journal of Zhongnan University of Economics and Law 6, 93-99.
Zhu, C.F. and Li, Z.W. (2008) Research on the Effect of State Holding on Accounting Conservatism. Accounting Research, 5, 38-45.
Du, X.Q., Lei, Y. and Guo, J.H. (2009) Political Connections, Political Contacts, and Accounting Conservatism of Private Listed Companies. China Industrial Economy, 7, 87-97.
Chen, Y.Y., Tan, Y. and Tan, J.S. (2013) Political Connections and Accounting Conservatism. Nankai Management Review, 1, 33-40.
Jiang, Y. and Tian, K.R. (2013) Internal Characteristics of State-Controlled Listed Companies, Government Grants and Accounting Conservatism. Auditing and Economic Research, 1, 77-86.
Lin, H. (2006) Accounting Discretion and Managerial Conservatism: An Intertemporal Analysis. Contemporary Accounting Research, 23, 1017-1041. https://doi.org/10.1506/0343-6720-V320-4730
Wang, R.Z., ó Hogartaigh, C. and van Zijl, T. (2009) A Signaling Theory of Accounting Conservatism.
Stiglitz, J.E. and Weiss, A. (1981) Credit Rationing in Markets with Imperfect Information. The American Economic Review, 71, 393-410.
Mintzberg, H. (1978) Patterns in Strategy Formation. Management Science, 24, 934-948. https://doi.org/10.1287/mnsc.24.9.934
Yang, H.J. (2007) A Review of Research on Accounting Conservatism. Accounting Research, 1, 4.