This study investigates how a stock price crash in industry affects the other firm’s conservative accounting. Stock price crash is a drastic decrease of stock return which is caused by accumulated negative firm-specific information suddenly becomes publicly available. Hutton et al.(2009) find the opacity of financial information are related to stock price crash. When a firm experience stock price crash, the other firms within the same industry will observe the loss from experiencing stock price crash and tried to prevent stock price crash risk. Therefore, the managers of interest firms are likely to try enhancing financial reporting transparency as the way of preventing stock price crash. In addition, this effect might be greater when a firms are in industry with higher market competition. Our empirical evidence provide results that firms in industry with higher stock price crash ratio are more conservative in accounting. And the conservatism is more increased with higher market competition. This means a firm’s certain economic event can be an information of the other firms resulting in change of financial reporting method. Further analysis find that this information transfer effects are greater when the difference of market capitalization between firms are smaller, when the analyst coverage are higher and when the information asymmetry are higher. This study contributes to extant literature by showing the other firms are affected by stock price crash in industry and managers are try to improve transparency of financial reporting proactively.