Independent directors’ board networks and accounting conservatism

Shangkun Liang, Dong Chen, Bin Fu and Kun Fang

China Journal of Accounting Studies, 2017, vol. 5, issue 2, 173-195

Abstract: This paper studies the influence of network centrality of independent directors on accounting conservatism. Using A-share list companies from 2007–2012 as the sample, we find that: (1) the higher the network centrality of independent directors, the lower the accounting conservatism; (2) considering the different environment in which the companies operate, network centrality of independent directors only has a significant influence on accounting conservatism in regions with a poor financial development environment and a poor legal environment; (3) considering the different environment within the companies, the network centrality of independent directors only has a significant influence on accounting conservatism in companies without bank connections. The findings of this paper enrich the studies of determinants of accounting conservatism from the perspective of association with characteristics of independent directors, and show the substitution effect of an institutional environment and other networks to the function of network centrality of independent directors.

Date: 2017
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DOI: 10.1080/21697213.2017.1339430

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