The Empirical Study On Effects Of Accounting Regulations In Chinese Capital Markets

Accounting regulations in capital markets play an important role in restricting accounting checking action of listed company and improving the quality of listed companys' accounting information.In order to examine the effect of accounting regulations in China capital markets, this paper takes empirical analysis on market reactions of accounting imformaton disclosures from two angles of value-relevant research and economic consequences research.Firstly, the thesis analyze the value-relevance using association study method: I employ Ohlson Model and thus model security price as a function of two fundamental accounting variables-book value of equity per share and earnings per shares to test the explanatory power that earnings and book value have for prices in order to examine whether value-revelance of accounting imformation has increased going with issue and implement of accounting regulations; Further, I examine the differences in the value-relevance among different types companies during capital markets's accounting regulations with respect to three factors including 1) positive vs. negative earnings, 2) big vs.small A stock currency proportion, 3) A-share vs AB-share companies. Secondly, the thesis apply event study method to economic consequences research: I investigate the market reaction during the days surrounding the issuance of "New Enterprise Accounting system" based on a 5-day window centered around the announcement date; Further, 1 investigate an association between cumulative excess average return and some variables to observe the market reaction of new new four accounting rules' implementing.The empirical results indicates: (1) the explanatory power of earnings and book values for stock prices have increased gradually in the Chinese market due to material improvement of the quality of the accounting imformation as consequence of the more strict accounting regulations. (2) New Accounting System's implementing have overawed negative earnings companies. Earnings per shares's influence on active investor have increase and equity per share's influence on active investor have decrease. Market reaction of accounting imformation in A-share companies has strengthened after New Accounting System's implementing's implementing. (3)The market reaction of new Accounting System takes a transition from negative to positive. (4) The influence of main operation variables on the market reaction of new four accounting rules strengthens and shows that new accounting system is helpful to lift the earning quality of listed companies.