An Empirical Study Of The Value Association Of Accounting Earning Level In The Later-day Of Share-trading Reform Era

Compared with the securities business of west developed country, Chinese securities business, with only 20-years developing course, is still belong to the boom-business and situated in the state of developing. During the fist developing 10-years of Chinese securities business, the whole business was inefficient and filled with the atmosphere of opportunism for a long time; the phenomenon of business gloss and manor monopolization was too common to everyone in the securities business; as a result, the fist developing 10-years of Chinese securities business is named after"an epic poem of manor"by some scholars. As we enter into the 21st century, our securities business is taking huge changes as well as the condition of our country economy.Equity division, which exercise influence over the efficiency of stock business, is one of the drawbacks leaved behind during the economic transition of our country. During the state of equity division, the ratio of non-tradable shares in the total shares of the listed company is very big; the phenomenon of state shares due to dominance is obvious; state shares'dominance state and the supervision missing of the owner of state assets bring about the question of internal control; same shares with different prices and different rights cause the principal shareholder who controlling big percent non-tradable shares take less attention on the stock price as the tradable shareholder, sometimes, maybe the principal shareholder would falsification the earning data of the listed company by using the predominance of asymmetric information.Equity division reform, which is carried out in 2005, sweep away the obstacles in the capital circulation and speed up the liquidity of the whole market. As more and more listed company finishing equity division reform, our security business enter into a new ear—"later-day of share-trading reform era", the whole phenomenon of the business come to maturity day by day, the circulation of the listed company is approaching perfection day by day under the market supervision, the efficiency of the whole security business is promoted at the same time.Under the background mentioned above, making research on the value association of accounting earning could help us know more about the true value of the earning information , and raise investors'knowledge about the accounting earning level, promoting the optimize resource allocation.The model check in this paper take benefits from the return model (Easton and Harris, 1991) and price model (Ohlson, 1995), in addition, the used model in this paper take other more factors into account as an improvement on the basic model. The test sample in this paper are 201 listed companies which complete the equity division reform, with the time horizon dated from May 1st of 2005 to April 30 of 2010. At last, with the help of SAS software, the research on accounting earning level is satisfactorily completed. The result of the test state clearly that: the information of accounting earning related to Operation profits has higher value association than that related to Net profits; accounting earning level could interpret the equity returns better than the change of accounting earning; besides the accounting earning level, shareholders'equity (book value) could interpret the equity price too.