The Analysis Of The Influence Of China's Corporate Governance On Accounting Transparency

Accounting transparency has become the focal point of academe since several accounting scandal incident shock the world in 21st century. Accounting opaque influence investors'interests seriously, and corporate governance has catch attention of global observers of different subjects recently. As to accountants' opaque problem, there are interior reasons and exterior reasons because of our country 's peculiar system. Mainly the flaw of corporate governance and interior controlling made the interior problems, and the exterior reasons mainly connected with problems of corporate supervision, problems caused by accounting system carrying out, and faith problems of agency organizations. And the key of numerous actions to improve the accounting transparency is to improve corporate governance. The accounting transparency does not merely depend on specific management mechanism of a corporate, conversely, information system with high accounting transparency will improve the perfection of corporate's mechanism. The relation of financial accounting and corporate governance is alike the relation of system and environment. This paper makes some discussion on improving accounting transparency in aspect of the perfection of corporate governance. Asian financial crisis and the Enron debacle made the accounting transparency question out of water. The most crucial in improving accounting transparency is corporate governance structure, so this paper make the discussion based on this point. Normative researching method has been used in this paper, which means the author make research from raising problems to analyzing problems and to solve problems at last. Few domestic scholars research on infections of corporate governance on accounting transparency directly, mostly they study corporate governance structure singly or accounting transparency problems singly. And some few researchers study them at the same time but in terms of information disclosure. So this paper integrated ideas of scholars inside and outside of China, detailed the corporate governance problems. Though this stand is very centralized, but we can see detailed solutions at the same time. This paper draw lessons from corporate governance structure of ten famous multinational companies, and classified them into two types. The first kind is a typical American manage organization structuring , which means stockholders meeting ----board of directors----management staff. Another kind is somehow like Chinese manage organization structuring, which means stockholders meeting ----board of directors----board of supervisors----management staff. Not only manage organization structuring affects corporate governance, but also the arrangement of duty and power especial of stockholders meeting and board of directors affect corporate governance. This paper give details of arrangement of duty and power for stockholders meeting, board of directors and board of supervisors. We can learned from theseten companies that the best way of strengthening supervision mechanism is to establish and perfect independent directors mechanism. And this is to make sure "who will supervise"essentially. Chinese corporate governance mechanism produced many illegal accounting behavior which offers false accounting information, especially when those corporates are applying for capital issue of stocks, applying for rationed shares and public company accepts auditing. The statues of situation Chinese corporate governance mechanism is far away from optimistic: mostly stockholders meeting is furnishing and has few restriction on board of directors, board of directors has few restriction on management staff, board of supervisors just has a name and can not supervise the management staff, independent directors do not have enough independence and without enough power, new three boards confused with old three boards and no effective decisions can be made. And those do not only cause insider controlling phenomenon, and cause relation of public company and audit agency supervise out-of-balance, make the audit agency lose independence, threat greatly the execution quality of accounting criterion and relevant information announcing system, delay the realization of accounting transparency seriously. The author classified those problems into five aspects: accounting disclosure of information is untrue and the accountants makes fakes serious, disclosure of accounting information is incomplete, the disclosure of accounting information is not in time,and declaration increases,and the content of preview of earnings is altered at will. So this paper analyzes theproblems in terms of stockholders meeting, board of directors, board of supervisors, independent directors and management staff. In order to improve the accounting transparency , strengthen the credibility of accounting information , promote the limited social rational distribution of resources and effective operation of the capital market, the author analyzes from following several aspects. Firstly, set up rational stock ownership structure, avoid the controlling of stockholders meeting by some strong stockholder, make the distribution of share ownership appropriate. Secondly, perfect the inside mechanism of stimulous, carry on the rational and appropriate competition of attorneyship. Thirdly, set up the system of audit committee. The setting-up of audit committee is undoubtedly essential. The independent directors' key value lies in supervision to board of directors and management staff, and audit committee ensures that independent directors fulfilled it's supervision function. Fourth, strengthen the role of weak stockholders. In China, strong stockholders limited the power of weak stockholders, and those voices can not make sense on corporate management. Fifth, perfect the independent directors' system, give full play to the role of supervision of the independent directors. And this make it clear "who will supervise". At the end, the paper give some suggestions. After research on perfect of corporate governance and improving of accounting transparency, the author figure out some countermeasure, this is a conclusion of this text. But this paper has certain limitations, such as the ignoring of influence to improve accounting transparency because of interactions...