An Empirical Study On Conservatism Of New Accounting Standards

In our country, as an important indicator of investor decision-making, accounting earnings has been a pivotal position over the past decade of accounting systems reform and capital market reform, and its quality has been widely concerned by many social fields. In 2006, the Ministry of Finance issued the new accounting standards including one basic criterion and 38 specific criterions, which made a large number of amendments vs. the original criteria, and achieved a convergence with the international accounting standards. Then, what change will happen to accounting conservatism which is a measure of accounting earnings quality after the implementation of new accounting standards has become a matter of concern.Based on this background, the article selected all A share listed company data of Shanghai Stock Exchange and Shenzhen Stock Exchange in 2006 and 2007 as the study sample, used Earning'skewness measurement, Earning-stock return model, Earning persistency model and Accruals-cash flow model to study the existence and changes of conservatism before and after the implementation of new accounting standards from two aspects: (1) Before and after the implementation of new accounting standards, whether China's listed companies had accounting conservatism? (2) After the implementation of the new accounting standards, what changes happened to the accounting conservatism of China's listed companies compared with before?The results show that: (1) Accounting conservatism existed in both year 2006 and 2007. In other words, there exists asymmetry between"good news"and"bad news"in China's listed companies both in 2006 and 2007, accounting earnings reflects"bad news"more quickly than"good news". And "bad news" is easier to reverse than"good news". (2) After the implementation of the new accounting standards, the conservatism of accounting earnings reduced. Although the new accounting standards listed the conservatism as one of the requirements of accounting information quality, because of the conversion of accounting objectives from the view of entrusted duty to the view of decision-usefulness, the new accounting standards also illustrated that the conservatism is a secondary requirements, it emphasized on "true and fair" of accounting information much more, in this context, the new accounting standards followed the principle of moderately conserve. .