Abstract: By making use of the empirical data of A-share state-owned listed companies from 2001 to 2013, this paper studies the influence of compensation regulation on accounting conservatism in state-owned enterprises and the differences of such influence between local state-owned enterprises and the enterprises run by the central government. The results indicate that the top managers’ compensation regulation of SOEs can really improve the accounting conservatism; compensation regulation can reduce the impulse of the top managers to seek better accounting performance. Compared with the top managers in local SOEs, the compensation regulation for the enterprises run by the central government is more able to help improving accounting conservatism. The shareholdings of the top managers do not affect corporate accounting conservatism. The adoption of the new corporate accounting standards from 2007 has lowered the corporate accounting conservatism; the corporate growth is negatively correlated with accounting conservatism. In addition, the study finds that the level of accounting conservatism in local SOEs is higher than that in the enterprises run by the central government; the compensation level of the top managers in local SOEs is lower than that in the enterprises run by the central government.

Key words: executive compensation; compensation regulation; accounting conservatism; state-owned enterprise