An Empirical Study Of The Impact Of Share-trading Reform On The Value Association Of Accounting Earnings

The quality of accounting earnings information has always been the center of people's concern. While how to analyze and evaluate it is not only a main academic theme, but it also has practical significance.Share-trading reform of public company started officially in May 2005. It is an institutional reform which is meant to solve the problem of share-trading in Chinese capital market. However, what will occur after the reform? And will the value association of accounting earnings (VAAE) be strengthened?Beginning with the reform and the application of the responses, this essay is meant to figure out the rationality according to the quantitative study of the quality of accounting information before and after the reform. Moreover, employing connection analytic study with the adoption of reward-mode and price-mode in the process of examining some model companies, of which some have finished the reform as well as others which haven't, this essay presents the following conclusions: First, according to reward-mode, if we compare the companies which finished the reform in 2006 and those in 2004, the VAAE of the former has greatly increased. It is different between the companies which have achieved the reform in 2006 and haven't. Second, according to price-mode, the difference of the VAAE between the companies in 2006 and those in 2004 is very small. However, the value association of net asset (VANA) has been evidently improved. When compared with that of the companies which have achieved the reform in 2006 and the companies that haven't, the former did make clear improvement in the VAAE, while VANA underwent a remarkable drop.To sum up, the Share-trading reform exerts a certain influence on Chinese capital market. However, the VAAE not only relies on the advancement of the Share-trading reform, but it is also inseparable form the further innovation and perfection of the mechanism of Chinese capital market.