Study On The Effectiveness Of International Harmonization Of Accounting Standards In China

Accounting is known as"international commercial language". It is an important tool to bridge the gap between the domestic market and international market. After China became a member of WTO, our enterprises are closely linked with international capital market. In order to reduce the cost of investment and financing, to improve the international comparability of the accounting information, and to encourage international capital flow, it is time for China to compliance with international standards. For this reason, this paper analyses the differences between the accounting standards of our country and the International Financial Reporting Standards (IFRS).This article is based on information disclosure of B-share market in China and the process of international harmonization of accounting standards in China, and other researchers' research literature, and provides a detailed analysis and study. The whole article will be spread out in two dimensions, including the difference between profits after taxation of the dual annual reports and the value-relevance of the annual reports. The result of the research shows that the profit variance hasn't been decreasing remarkably since 2001 accounting reform and difference is relatively great to the execution result of the new accounting standards in every year. The data of accounting earnings prepared under International Financial Reporting Standards isn't more relevant than that of Chinese GAAP. The paper offers the realistic evidence for the future development of international harmonization of accounting standards in China.