Board Independence and Accounting Conservatism: Evidence Based on Listed Companies in China

Conservatism are regarded as a fundamental characteristic to measure financial statements, and board independence is viewed as an important tool among corporate governance. Both of them have been academic focuses. The paper examines the impact the independence of board of directors has on accounting conservatism, with the data of all the listed companies of A share market in Shanghai and Shenzhen from 2007 to 2009. The results demonstrate that in generally, listed companies in China have accounting conservatism in their accounting policies. Moreover, the increasing percentage of independent directors in the board benefits the improvement of accounting conservatism. However, CEO/Chairman separation won´t work on that.