Research On Accounting Of OTC Market

The development of the market economy relies on the system of sound capital market. OTC market is the foundation to improve the system of capital market,set up a multi-level capital market.Over-the-Counter Market is also known as OTC market,which is relative to exchange.OTC market is the place where non-listed public companies transfer their ownership and shares in circulation.It is the primary market to meet the development needs of small and medium enterprises with growing and the needs of shares in circulation off the capital market.As a place where non-listed public companies financing directly,there is a principal-agent problem in OTC market such as in exchange.The orientation of exchange is to the sophisticated large- medium enterprises,it takes the auction trading mechanism;the listing requirements are very strict.But the small-medium enterprises(SME) in OTC market are in growing period which are small-sized,lower information,and high investment risk.Non-listed public companies are small-sized,so it is easy to form the phenomenon of large shareholders.Under the market environment with information asymmetry,it is easy for large shareholders to manipulate the information of company which will damage the interests of small and medium investors.Therefore,OTC market's characteristics are that investment risk is higher,the liquidity of stock is lower,and the volatility of price is more frequently and so on.In order to overcome these problems of OTC market,the operating mechanism of OTC market usually adopts the market maker rule.In market maker rule,the market maker reports the bid-price and the ask-price,and participates in market transactions with their bid-ask price.The difference between the bid-price and the ask-price is bid-ask spread.The spread is a major source of marketing income of the market maker.This shows that although OTC market and exchange all belong to the capital markets,and also the place to finance capital,but the operating mechanism and corporate characteristics of OTC market are different from those of exchange,so the establishment and development of OTC market can not be separated from the institutional arrangements that are suitable in its operation.The research on accounting of OTC market around the OTC market will make contributes to set up the system of accounting information which is suitable to OTC market.Research on accounting of OTC market builds the listing company's system of accounting information about OTC market from a broad perspective of accounting.This thesis is only focused on three aspects around the principle part it:(1) what is the object of research on accounting of OTC market?(2) What is the basis of research on accounting of OTC market?(3) How to build an effective system of accounting information about the OTC market? From the perspective to promote company's development in the OTC market and protect the interests of investors,this paper explores the building on the system of accounting information about the OTC market.This paper researches the accounting of the OTC market with OTC market under the capital market system from a macro level,which will avoid the short horizontal about independent research on accounting of OTC market,and help to improve the theory of capital market accounting and feasibility to implement the system of accounting information about the OTC market.As new markets of capital markets,the research on accounting of OTC market is still a blank spot.OTC market is regarded as a subsystem of capital markets in this paper;systems analysis method is used to build the framework for research on accounting of OTC market. History comparative method is applied to compare comprehensively and analysis the system of accounting information about OTC market of the overseas country or region,to provide valuable experience to build the system of accounting information about the OTC market for China.In order to understand the reality background of OTC market in our country,the field research method is used in this paper to show the basic environment of OTC market in China. Standardize research method is used broadly in this paper.Through a questionnaire survey,it is objective to understand the information needs of a decision-making to invest for investors;and also carry out empirical research on the status of information disclosure about the system of transfer for agent shares in China and the results of a questionnaire survey,to enhance the application value for research on accounting of OTC market.First of all,this paper introduces the microstructure of OTC market and the need to set up OTC market,and analyzes the effectiveness of OTC market.In order to understand the object of research on accounting of OTC market,this paper researches the listing standards in OTC market from the perspective of market position,the listing standards include the standards of initial public offering and the continued listing standards of the transaction(or exit criteria).In the basis to compare comprehensively and analysis the listing standards of overseas country,the listing standards of OTC market in China is set up.Setting up the listing standards of OTC market is to realize the oroemtation of OTC market,and form the research subject of OTC market accounting,i.e.the listed company on OTC market.Secondly,price is an important tool for market resource allocation.As an information system,accounting is mainly to resolve the problem of market information asymmetry,so the basis of research on accounting of OTC market is operating mechanisms of OTC market and the valuation model.The operating mechanisms of OTC market are usually a market maker system.This paper introduces the market maker system and analyses the types and causes of asymmetric information under the market maker system,and also proposes the concept of "information asymmetry in economic" and "information asymmetry in behavior" for the first time,and shows that accounting research is to resolve the problem of "information asymmetry in economic".As a resource,information mainly plays the role through impacting on the market valuation.This paper introduces the traditional information model and the expansion of the information models about current valuation on OTC market.It is easy to understand the preconditions of research on accounting of OTC market by the analysis of the operating mechanism and valuation models about OTC market.Finally,How to build an effective system of accounting information about the OTC market? This paper put OTC market into the system of capital market innovatively;Viewed OTC market as a part of the capital market.As listed companies on exchange,the recognition, measurement and recording of the financial information about listed companies on OTC market are required to comply with generally accepted accounting principles(GAAP).The only difference is that the disclosure of financial information.An effective system of accounting information about OTC market mainly refers to an effective system of information disclosure. This paper provides a valuable reference for building the system of information disclosure about OTC market in China through a comparative analysis of the evolution,structure,content, patterns and economic consequences of information disclosure syetem about OTC market of overseas countries.At the same time,this paper is based on the system of transfer for agent shares which is regarded as the rudiment of OTC market in China in this paper,and is based on it to analyze the reality basis of disclosure of information on OTC market.The design of system of information disclosure about OTC market in this paper is based on the system of information disclosure about listed companies on exchange,the information needs of investors on OTC market is known by a survey of institutional investors.Combining with the analysis of information which will promote the development of listing companies on OTC market,this paper builds the simplified system of information disclosure about OTC market is designed.Accounting research scope is broad.Because of the restriction of content,this research on accounting of OTC market is only focused on financial accounting,without taking into account the content of management accounting,corporate governance and so on.