Propriety Of Professional Accounting Judgment,Accounting Standards Reform And Value Relevance

Originating of the convergence of International Accounting Standards and construction and improvement of principles-based accounting standards system, accounting professional judgment provides a potential driving force for the internalization of externalities of accounting information. In eliminating the information asymmetry problem and relieving trustees'principal-agent responsibility in benefit equilibrium game, the propriety of accounting professional judgment play an irreplaceable role. This article,based on economics principle of accounting professional judgment, intends to define and clarify the concept and boundary of accounting professional judgment,then put forward "tracheotomy" analysis of the propriety of accounting professional judgment: First in the background of property right accounting, analyze the contingency theory of accounting professional judgment in accounting standards changes; Second,with the separation of residual claim and residual rights of control , make the accounting staffs'"accounting specific assets" congenitally under-investment,result in "Hold-up" problem of accounting professional judgment; Third, for the incomplete contract in the process of accounting standards formulating and implementing,the propriety of professional accounting judgment is institutional constrained and challenged.In this paper,we use traditional price model and income model by the sample of the listed company of A-stock market,2004-2007,quantify the propriety of professional accounting judgment and make a relevant test. Empirical results show that the propriety of professional accounting judgment has shown a strong market response,can enhance the value relevance of stock prices and enhance the ability to explain the stock returns. A further study of data before and after the implementation New Enterprise Accounting Standards has shown that it improves incremental information content of the propriety of professional accounting judgment. Test results showed that the implementation New Enterprise Accounting Standards is conducive to accounting information processing and disclosure,more conducive to investors and potential investors to carry out investment decisions.