Accounting Information Relevance Research

Since the classic work of Ball and Brown in 1968,the research on the accounting information is fruitful.The researches cover the earning quality,information content of earning components and information content of stock price,the study technology is more diverse.However,most papers concentrate in the earning,rather than in the accounting information on the whole.But for investors,especially the retail investors contact this type of information frequently.This paper tests the relation between the accounting information and the stock market with the state of market and enterprise size.In the accounting information,the accounting information is divided into short-term solvency capacity,long-term solvency capacity,asset management capacity,profitability capacity with the mature financial management classification.In the stock market performance,the unexpected annual earning is used.Further more,the correlation and partial correlation are used to select the accounting information ratios.When we come to the hypnosis test step the state of market and the size of the enterprises are used as classified variables to build four models.The test show:when class with state of market,the investor narrow the scope of accounting information but greater using in the depressing state,converse when boom;when class with the enterprises size,the correlation increased by the size;when class with state of market and enterprises size, the result work as expected,the prior two test result is inherited.To the retail investors,this paper's findings have some practice meaning in a certain scope.At least the findings can remind them how to consider the state of market and enterprises size when they use accounting information to make an investing decision,also they can imitate the paper's way to establish their owned model,and this will help their decision.