Study On The Contract Nature Of Accounting And The Change Of Enterprise Accounting Rules

The institution change is a process in which profit is redistributed and redisposed,and is caused by not satisfying the individual behavior subject's demand for prifit under the existing system.The change of accounting rules is not only a purely techanological process but also a complicated political and economic process which concerns law, economy, and ideology. The inner development of accounting rules depends on the perfection of accounting measurement level and the increase of economic theory level, for example the application of computer to accounting, which makes accounting information marketable and reduces the transaction cost of accounting behaviors. In terms of its outer layers, is for seeking superprofit-"contract rent" brought about by contract (Chen Goufu,2000). As a component of economic system, accounting rules have been in the supporting position and greatly attached to the arrangement of other rules, so there are quite few scholars doing research in this field. There are following scholars who have done some related research in this field: Liu Feng(1996,2000), Yang Shizhan(1998), Qu Xiaohui (1999), Luan Fugui (2004)have respectively done some research on the changes of enterprise accounting rules themselves; Jiang Yihong(1998) has talked about the influence of Chinese stock market development from 1985 to 1997 on accounting rules themselves; Xiang Bing(1998)has analyzed the trend of Chinese accounting rule reform. Hilmy (1999) has analyzed the changes of accounting environment from 1949 to 1993 and some definitions of accounting system reform. Xiang Huaicheng (1999) has depicted the process of accounting development in China from 1949 to 1999. Generally, the research has the following features: (1) the research was done mainly after "Two Rules and Two Systems" was put into practice(1993), and mainly discussed the related rules; (2)the research was not done deeply and widely enough. According to the documents available, there is more research on the environment related to accounting and on international coordination of Chinese accounting system, but less research on putting accounting system in the whole economic system structure; (3)there is a lack of theoretical base. The establishment and development of any discipline must be based on the specific theories. For the lack of the studies on theoretical base, it is naturally hard to carry out the exploration on the theoretical base of accounting system.After a careful review of Chinese accounting reform and accounting rules, it's easy for you to draw such a conclusion: after 1978, especially after the socialist market economy system reform took place, persistent and deep changes have occourred in China's social structure, the biggest change was from the administrative conformity to the contractual conformity, original economical political relation based on the status relation is being substituted gradually by the contractual relation. Accordingly, some new business and activities emerged one after another in the economic life, in order to dispose these new business,and to adapt to economy globalization trend of development, China took consecutive reform in accounting system and achieved remarkable success. But some phenomena can't be put down, such as accounting fraud, CPA professional ethic restraint weaken. These problems concern enterprises, government and market. To solve these problems, we have to start with the contract underlying the rules. In this article, enterprises, government and market are all integrated in a theoretical framework by contract. Modern enterprise theory puts its reseaech eyes onto the inner profit relation network of the whole enterprise.The profit relation is both the property right relation between enterprise profiteers and the base upon which the contract relation is formed between enterprise profiteers. Through discussion of relation between accounting and firm ,we find the appropriate breakethrough point- the contract nature of the accounting,and utilize the theory of institutional changes and the contract theory to examine our country accounting rules change from 1978 to 2004, finally draw such a conclusion: Along with the multiplicity of the property right main body, the contractual negotiations would carry on, the change of the threat point, the risk manner and the negotiations strength, would be reflected through contractual correspond variable. Accounting to this change, each participant of accounting contract would adjust his anticipate of the cost-income, and produce the power of reestablishing contract.The change of accounting rules would embody the benefit of the stronggest side(s) in accounting contract.More important one was the departed study on accounting rules regarded institutins as contract directly, the disposal covers the important meaning of contract to institutions, institutins is the externality of contracts, institutional change is the consequence of contract. In this case, the other purpose of the study is to reveal the logistic relation between accounting rules and accounting contract in the outline of accounting activities (transaction)-accounting contract (contract)-accounting rules (institution).The creativity of this research lies in: firstly, the article tries to understand the nature of accounting—accounting as a contract on the basis of some related theories of economics instead of the traditional study mode of accounting for accounting's sake. Personally, no matter whether it is accounting theory research or accounting application research, it must be guided by certain theories. These theories mainly include philosophy, economics, management science and law etc. As a category in the study of law and economics, contract brings all participants in the accounting information deal into the analytical frame, which can help study the change of accounting rules used to standardize the accounting information deal more deeply and widely and help find the dynamic power source for accounting rules changes and finally help set up a broader platform for further studies; secondly, the article puts forward the view of taking accounting rule as the expression of accounting contract and accounting contract as the tool to balance accounting rule supply and demand, and the article proves the view according to the materials available. The development of accounting rules is decided by the adjustment of accounting contract relation, while the adjustment of accounting contract relation is related with the power contrast of all participants and its environment. It is undoubtedly necessary and important to have a complete, systematic and dynamic understanding of the connotation and evolution law of accounting rules, to reinforce the scientificity of accounting rule design and self-consciousness and effectiveness of accounting rule application and to improve the theoreticalness of accounting rules; thirdly, accounting rules are to be studied completely and systematically. The traditional studies on accounting rules usually focus on the content and method of the country's uniform accounting system and the relation between accounting system and accounting principles. Based on the completeness and systematicness of accounting rules, the writer of this article tries to study the theories and construction of accounting rules completely and from different perspectives and further to construct the theoretical system of accounting rules.The outline and main idea of each chapter are as follows:Chapter 1 is an introduction, which gives reasons for choosing this subject; presents some basic definitions and hypotheses; elaborates the research methods; fixes the logical starting point of research; the overall structure, the creativeness and difficult study points of dissertation.Chapter 2 is theory review, including the theory of institutional changes of the new institutional economics and the public choice school. This chapter also reviews the relative theory of accounting rules change and the nature of accounting. It points out the theory of the new institutional econimics neglects the factor of exterior surroundings; the theory of the public choice school only discusses interest groups and its profit relation, but it can't reveal the effect of profit conflict. There are four schools at study on accounting rules: the view of technical process; the view of economical consequence; the view of sharing of firm's residue; the view of public contract. The previous three standpoints are based on the neoclassical economics, which takes enterprise as a productive body. Under the guide of this theory, the focus of accounting research is on its confirming, measuring, recording, reporting and managing profit when the enterprise deals with market. But, in reality, the enterprise behavior is decided by the concrete behaviors of all the enterprise participants rather than the profit of the enterprise as a whole. Although the fourth view is based on modern enterprise theory, it takes accounting rules as public contract, thus covers up the important meaning of contracts to institutions.Chapter 3 and 4 are about the establishment of theoretical framework. Chapter 3 is based on the nature of firm contract, dicusses the nature of accounting, the relation of accounting contract and firm contract, the characteristics of accounting contract. Modern enterprise theory considers that the firm is a nexus for a set of contracting relationships, accounting is an essential part of firm contract, is kind of market contract and relation contract. Chapter 4 is based on chapter 3, which derivates the contractual framewoke of accounting rules changes-the accounting rules changes are the consequence of accounting contract adjustment and embody the benefit of the stongest side(s) in accounting contract. Thus, the government, CPA, investors, and corporate managers all have been integrated in analytical framework. Cgapter 4 briefly discusses the basic constitution of accounting contract and sketches the basic framework of accounting contract.Based on the accounting changes in China from 1978 to 2004, Chapter 5 verifies the theory put forward in Chaper 3 and 4 and gives positive analysis of the transitional period (1978-1991); early period (1991-1998) and recent period (1998-2004) of the accounting system reform respectively with the said theoretical framework.The last part summarizes this research are conclusion and the questions need further studies.