Study On The Contract Motivation Of Accounting Policy Choice

Accounting policy choice is one of the focus fields in positive accounting theory research. With the contract theory, the foreign accounting scholars have made lots of fruitful studies in it, which are mostly based on three hypothesizes, Political Cost Hypothesis, Debt Contract Hypothesis and Pay Contract Hypothesis. However, there are only few national studies in this field, and even fewer positive studies. With the deep going of economic system reform and the establishment of modern enterprise system and capital market, it is not only possible but necessary for Chinese scholars to make better studies on accounting policy choices. In this paper, with the methods of theoretic analysis and empirical testing, a series of studies on contracting incentives of accounting policy choice have been made, and some conclusions have been drawn. There are three parts in this paper. The first part includes chapter 2, chapter 3 and chapter 4. Based on the introduction of the relevant conceptions of accounting policy choice, the necessity of accounting policy choice and possession of choice power are discussed in chapter 2. In chapter 3, we mainly analyze the theory basis of accounting policy choice motivation including contract theory and agency theory. Besides, we analyze the political cost, debt contract and pay contract. In Chapter 4, we summarize the relevant studies on accounting policy choice incentives. The analysis in this part is the basis of the empirical testing in part 2. The second part is chapter 5 and it is the core of this paper. Through one by one matching between research samples and controlled samples, the contract factors of the low-value consumable accounting policy choice were testified by methods of single variable test and Logistic regression. Then, the industrial effect on accounting policy choice was analyzed by the χ~2 testing. Finally, through results of empirical testing and problem discussion, it shows that the Pay Contract Hypothesis and Political Cost Hypothesis were validated, and the Debt Contract Hypothesis is negative. The third part includes chapter 6. Based on positive study results in the second part and the former theory analysis, we have drawn some conclusions about the incentives of our national accounting policy choice. Then, we offered some proposals for continuing the relevant study.