Study On Usefulness Of Accounting Information In Management Contract

The research of accounting information usefulness includes contract usefulness and value relevance.Value relevance emphasizes on the pricing function of accounting information,while contract usefulness emphasizes on the governance function of accounting.In terms of the current development of China's capital market and the legal environment,the ability of accounting information to play the pricing function needs to be improved,and its governance function is more obvious.Therefore,it is more practical to study the role of accounting information in the conclusion and performance of management contracts(management incentive contracts and employment contracts,etc.),that is,the usefulness of accounting information management contracts is more practical.This dissertation uses normative research,empirical research,comparative research and other research methods.Based on the Theory of Contract,the Theory of Property and Agency Theory,this dissertation studies the influence of Chinese institutional background,cultural background and quality characteristics of accounting information on the usefulness of Chinese accounting information management contracts.Specific research contents are as follows:First of all,this dissertation expounds the theoretical basis of the usefulness of accounting information management contract.According to the Theory of Contracts,enterprises are the connection of a series of contracts.The Theory of Property holds that the residual control right and the residual claim right should match.According to the Agency Theory,information asymmetry and different attitudes towards risks between investors and operators lead to agency conflicts.The incentive mechanism and supervision mechanism for operators can alleviate the agency conflict.In the process of incentive and supervision,as a comprehensive reflection of enterprise business operation activities and financial conditions,the accounting information not only provides the subject content for which the contract can be signed,but also an important supervision way to check the execution of the contract.Secondly,this dissertation analyzes the important factors influencing the usefulness of accounting information management contract: China's institutional background,Confucian culture and accounting information quality.In terms of institutional background,the Chinese government has the phenomenon of corporate intervention;the active manager market does not exist in China;the product market competition is limited to a certain extent;the market for corporate control rights is almost unavailable;the laws and regulations of the stock market are not yet perfect;the ownership structure of listed companies is characterized by the "one share monopoly" and the state-owned nature of controlling shareholders;the degree of marketization varies greatly from region to region.In terms of cultural background,as an informal system,Confucian culture,after long-term accumulation and inheritance,has become a clear but unknown code of conduct for Chinese people,which has a profound impact on enterprise behavior.The quality of accounting information,correlation and reliability are the two most important quality features of accounting information;the measurement methods of accounting information quality mainly include earnings quality and value relevance.Thirdly,on the basis of theoretical analysis,this dissertation puts forward the research hypothesis that there is a correlation between accounting performance and executive cash compensation,and that government intervention,legal environment,degree of marketization and Confucian culture will affect the correlation.The empirical results show that there is a significant correlation between accounting performance and executive cash compensation;Enterprises with less government intervention show higher usefulness of accounting information executive compensation;Enterprises with good legal environment show higher usefulness of accounting information executive compensation;The enterprises in the regions with high degree of marketization show higher usefulness of accounting information executive compensation;Confucian culture reduces the usefulness of executive compensation of accounting information.Fourthly,on the basis of theoretical analysis,the research puts forward the research hypothesis that accounting performance is negatively correlated with the probability of executive turnover,and that government intervention,legal environment,marketization degree and Confucian culture have an impact on the negative correlation.The empirical results show that there is a significant negative correlation between accounting performance and executive turnover probability;Government intervention,legal environment and Confucian culture will weaken the negative correlation between accounting information and executive turnover;The degree of marketization will enhance the negative correlation between accounting information and executive turnover.Fifthly,on the basis of theoretical analysis of the correlation between the valuation effect of earnings and the contractual effect,the research hypodissertation of the positive correlation between the compensation sensitivity of accounting information and the valuation of earnings is proposed.The empirical results show that the enterprises with high correlation of earnings value also have high compensation sensitivity.When considering the power of senior executives at the same time,the results show that the enterprises with low power of senior executives have stronger value relevance and compensation sensitivity.Finally,policy suggestions are proposed to improve the usefulness of management contracts of accounting information.First,continue to improve the institutional environment;second,give full play to the beneficial influence of Confucian culture and establish a comprehensive view of salary;Third,strengthen the value relevance of accounting information to promote the usefulness of management contract;Fourth,improve the corporate governance mechanism and effectively control the power of executives.