Changes In Accounting Standards: Based On Neo-institutional Economics And Game Theory

In the Accounting standards Change, Liu Feng has mentioned "there remains a lot of questions to study and explain in China's accountant institution change". Therefore, in this dissertation, some questions on China's accounting standards change will be discussed on the basis of neo-institutional economics and Game Theory together with the transition track of accounting standards. At the same time, a prospect will be made as well to see the trend of accounting standards development in China in the future.According to the Neo-institutional school, institution is a kind of behavioral regulation, which includes social, political and economic behaviors. (Schultz, 1968). Consequently, accounting standards—rules regulating the process of enterprise accountant information's formation - is an economical institutionIn the respect of Game Theory, institution could be understood as a social contract, which is formed gradually after the "repeated gaming" and help to understand each other's behaviors with comparative certainty in communication. Institution is the result of gaming while the process of institutional evolution is the very process of gaming in which the division of interests is continuously going on among the interests related. As the accounting standards is a institution with economical results, interests groups are inevitably pay close attention to as well as participate in its establishment process, which unavoidably leads to a political result—a result of struggle and compromise among different interests parties. Therefore, Game Theory could be used to study certain questions of accounting standards.In this dissertation, accounting standards will be considered in the respect of institutional study and the property-rights motive of its birth and its history of transition will be also reviewed. With the related theories of Neo-institutional economics and Game Theory, a systematical study will be made on the accounting standards change, so as to point out that accounting standards is the arrangement of reducing the exchange fee, the nature of transition is the requirement of reducing the exchange fee and the international change of accounting standards is a requirements-induced institutional change. And finally, the accounting standards change in China will be examined in the respects of subjects, means, motives and goals of change separately.The economical result of accounting standards will cause the politicalization of its establishment, so as to make it a process of dynamic and incomplete information gaming. Through the analysis on the game participant as well as its behavioral characteristics in the process of accounting standards establishment, we will get the conclusion that the accounting standards change is a process of social game and the "Nash Equilibrium Point" continuously approaching the high level and finally reach the "Pareto optimal state".In the end, based on the analysis on China's accounting standards change in the respect of Neo-institutional economics and Game Theory, some advices will be given to the development of our country's accounting standards in the future.