A Game Analysis On The Accounting Information Publication Of The Listed Companies Based On Corporation Governance

The issues both on the disclosure of accounting information and corporate governance are getting more attention in practice and in academic research. Especially, after a series of scandals such as Enron and WorldCom, governments over all world begin to seek the measures to norm the disclosure of accounting information to improve the quality of accounting information actively. Practice says that the key point for disclosure of accounting information is to improve the corporate governance. In order to study on accounting information distortion of listed companies that is increasingly severe in Chinese stock markets, this article makes every effort to innovate the method of research, introduces the game theory to the field to study accounting information distortion in our country, pays attention to corporate governance, including internal governance, Certified Public Accountants, China Securities Regulatory Commission, and the market regulation of Accounting information, in order to find a solution.In this paper, the main contents and conclusions are such as follow:1. the relationship between the disclosure of accounting information and corporate governance. Disclosure of accounting information and corporate governance are both to protect the interests of investors. Reflect the relationship between the enterprise systems and business environment. Accounting information in corporate governance has a role in communication, and corporate governance has a quality assurance role on the disclosure of accounting information.2. The game between managers and accounts. From the game model we find that, if managers choose threat, accounts will chose false information; if managers not threat, accounts will not choose false information. But if managers know the accounts' action, they will choose threat, so "threat, false" is the only Subgame perfect Nash equilibrium. From the process of accounting fraud, we know managers are active, accounta are Passive. If we strengthen the Punishment of fraud information, then managers wlii assume legal responsibility, managers wiil choose not threat, accounts choose Integrity, Nash equilibrium is "not threat, integrity".3. The game betwwn managers and the shareholders. Analysis through the game, we can see that static game does not exist Nash equilibrium, that is, managers and shareholders not have the only choice,we extend the model to the dynamic game model, through the mixed Nash equilibrium,we can seethat the shareholders adopt a mixed strategy non-audit or audit of pure strategy, so that shareholders can not prevent the implementation of the audit inspection managers lead them choose not to follow generally accepted accounting principles of the strategy ,is beneficial for shareholders to get a higher quality financial information.4. The game between managers and CPA. In order to prevent managers choose "fraud", by the pure strategy Nash equilibrium results, we know CSRC can not be Soft to CPA and listed companies at the same time,; by the mixed strategy Nash equilibrium results, CPA should base on the probability of 1 for "serious audit", listed companies choose a certain probability to "corrupt", the probability depends on the audit cost, the probability of the SEC and punishment to CPA. In order to make managers choose a lower probability of "fraud", we should increase the punishment to CPA if they failure the audit.5. The game between company, managers and CSRC. Since the best probability of Illegal operation by companies is Proportional related to the check cost, Inverse to fine and the probability of inspection, so reduce the check cost, increase the fine and increase the inspection quality can reduce the probability fo fraud.6. Conclusions and recommendations. On the basis of the above-mentioned analysis of accounting information distortion, In the accordance with the causes which distorts the accounting information, this article believes that only when our country adopte the comprehensive treatment measure, can we solve the problem of the accounting information distortions fundamentally. Firstly, we should strengthen the Punishment dynamics of the manager who gave the false information. Secondly, we should optimize the stock-right structure, including strengthening the Terms of the Board of Supervisors, improve the system of independent directors, establish an audit committee and improve the methods of performance evaluation. Thirdly, we need to strengthen the external supervision and control including CSRC and CPA. Finally, we should enhance market regulation of accounting information.Through Information economics and game theory, we know the ideal accounting information disclosure system is a balanced outcome of the game.