The Financial Reporting Model Based On Common Governance By Stakeholders

The core problem of corporate governance is how to arrange residual claim and residual control and to execute the corporate treaty. The content of the treaty decides the information demand of stakeholders. That is, the content of the treaty decides the content of the financial reports. Arid the content of the financial reports is a decisive factor of financial reporting model. In a long time, stockholders possessed the whole residual claim and residual control. However, with the development of the corporate governance, creditors, managers, government and employees come to join in the corporate governance. So the trend of corporate governance is coimmon governance by stakeholders. Under common governance, stakeholders have general demand on financial information: the total stakeholders' interest, the corporate value, the ability and the risk to add value, and tne distribution ratio on the added value. However, different stakeholder has different information demand. The writer proposes that the general demand should be satisfied in general reporting model and that the special demand should be satisfied in economic transaction reporting model. In the general reporting model, the writer designs a new information system. The system merges the financial accounting system and the management accounting system. The financial information flows in accordance with the value creation process. The process sorts out financial data by use of the principles of activity based cost. Therefore, the new financial reporting model fits the demands of stakeholders and decreases the information cost.