The Economics Interpretation Of Accounting Conservatism Principle And It's Paradox

Accounting Conservatism principle is a principle that is well known but very difficult to explain. Conservatism affects accounting system to the same extent as the water soaks into the soil, which makes all the accounting system has the mark of Conservatism. Although this metaphor is exaggerated but it fully reflects that it is essential and pressing for the field of accounting to study conservatism systemically in realistic cases.In the past, accounting scholar's research on conservatism was limited to the fields of the influence to relevance and reliability of accounting information, as well as, to finance & revenue and economic benefit of enterprises by the principle, but the studying in such aspects as the principle's origin and its inherent logic contradiction is much less. Applying the normative research method, this thesis will study the principle systematically. This studying focuses on the principle's origin, inspiration of innovation, the factors that make it exist, its paradox, and its application effects in accounting system.First of all, this thesis proceeds from relation between conservatism principle and uncertainty in accounting system. It expounds the fountain from which the conservatism principle comes into being and it's inherent logic contradiction. The author holds that the conservatism principle is a kind of accounting reflection modes that is formed from the uncertaintyin accounting, that conservatism principle adopting the reflection mode agglutinated with rational and unrational reflection mode to Uncertainty in accounting is the essential reason for it's inherent logic inconsistency, that accounting system adopting different disposal procedure and reflection mode to uncertain economic businesses is the material exhibition of the principle's inherent logic inconsistency.This thesis expounds the problems about conservatism principle's inspiration of innovation and the factors that make it exist from the perspectives of the property right of accounting information and its institutional changes and the theory of agent-principal. The author takes the views that conservatism is the representation of protecting and balancing the benefit of the proprietors of the property rights of accounting information, conservatism convention is the outcome of the institutional change of the property rights of accounting information, the inspiration of conservatism's innovation comes from the institutional change of the property rights of accounting information and its innovation, moreover, from the perspectives of the theory of agent-principal, since the choosing of conservative accounting polices must be provided with some economic consequences, the pursuing of economic benefits by different properties makes conservatism has its realistic conditions and objective factors that make it exist.Following, on the basis of above-mentioned theoretic analysis this thesis points out that the inherent logic contradiction in conservatism is the essence of its paradox. Because conservatism itself possesses unavoidable inherent logic inconsistency, a great deal of contradictions and conflicts were brought about in accounting system in the applicationIVof conservatism to accounting system. It may be said, these contradictions and conflicts are the representation of the conservatism's paradox.Finally, through the analysis of the effect of the conservatism's application to accounting system, the author points out that the "double-edged sword" function of conservatism's application in accounting system proved the existence of conservatism's paradox again, the existence of conservatism's inherent logic contradiction and its paradox also indicate that conservatism itself must be innovated, and that conservatism must be endowed with new connotation. In the conclusion, the paper points out that the innovative trend of conservatism is toward quantification and to try measure and reflect uncertain economic businesses, and this is also the future's focus in the filed.Theoretically this thesis...