Empirical Research On Domestic Accounting Earnings' Usefulness

Accounting earnings had been always regarded as an important index to decision. But its usefulness in decision-making has been suspected by both theoretical and practical circles since middle 20 century, and some scholars even put up with the opinion that cash flow is much more useful than accounting earnings. Therefore, it is necessary to have a further study on the usefulness of accounting earnings in our country, which will provide investors with valuable reference of efficiently using accounting information and will be helpful to promote rational investment.Basing on the related theories and literature review, author takes 197 listed companies from the year of 2003 to 2005 as the research sample and adopts the association study method and SPSS12.0 software to do the research. And the research content includes three parts: 1. Verify the usefulness of accounting earnings in decision-making; 2. Detect the factors influencing the usefulness of accounting earnings, and the discussion on multi-factors will be helpful to enrich existent domestic research content; 3. Compare the usefulness between accounting earnings and cash flow.Conclusions of this thesis are as follows: 1. Accounting earnings has a significant positive correlation with stock price and it is useful in decision-making. 2. The company' s financial risk, growth ability and scale do affect the usefulness of accounting earnings while the accounting persistence doesn't. 3. Both accounting earnings and cash flow play a part in investors' decision-making but accounting earnings is much more useful than cash flow.Lastly, author specifies this thesis' limitations and direction for further study.