The Ultimate Shareholder’s Property Right Nature, the Pyramid Level and Accounting Conservatism
LIANG Li-hui1, LAN FEN2, ZHANG Xue-hua1
1.School of Economics and Management, Southwest Jiaotong University, Chengdu 610031, China;2. School of Economics and Management, Sichuan University of science & Engineering, Zigong 643000, China
Abstract：
We study the relationship of the level of the pyramid and accounting conservatism and analyze the impact of the ultimate controlling shareholder of property rights nature on this relationship using the sample of companies with the ultimate controlling shareholder and the pyramid shareholding structures in Shenzhen and Shanghai securities markets during 2004-2010.We find out that the level of the pyramid is positively related to accounting conservatism and there is significant difference between state-owned and non-state-owned listed companies. The revise of company law, securities law and accounting standards plays an important role in improving accounting conservatism. The study concluded that the level of the pyramid reflects the behavior of control shareholders, so government regulation and corporate governance should take full account of the nature of property rights of the pyramid option arrangements and the ultimate controlling shareholder’s impact on the company.
2014 
