Research On The Rational Use Of Professional Judgments Of Accountants

After the launch of the new accounting principles from January 1,2007, China has made its accounting processes more adaptive to international schemes. The new scheme requires professional accountants' appropriate use of practicing rules, for example, how to practise fair value principle, how to identify "controllable" and "significant influence", and how to employ the fact-over-substances rule when dealing with non-monetary transactions.As the new principles plays a guiding role and significantly emphasises professional judgments, instead of being told directly what and how to do, accountants pick up creativity accounting under their own sense of judgments. This could be a reason of abusing the guiding rules. According to the research on listed companies after 2007, some companies show their strong weaknesses in practice on which principle to use and how. This results in unfair and non-objective accounting information. Consequently, Treasury has restated the importance of the launch of the new scheme. And to support it, trainings focusing on professional judgment skills have been provided. This article, in order to help the extension of the new scheme's launch scope, based on this background, tackles on existing pratising problems and reasons and looks at the counter-measurements.It starts from the critical review of the professional judgment theory. On the basis of judgment influencers, it lists out the professional judgments problems according to the practical circumstances of listed companies after 2007.It then further analyses reasons of the problems and recommends the counter-measurements.Five chapters are included. In the first chapter, it talks about the importance and background of this article. Chapter two discusses professional judgments. It defines what is professional judgment, identifies the nature of it and, analyses characteristics and components of it. Specifically, it tackles on the influential factors to the practice of professional judgments, such as environment factors, subjective and objective factors.Chapter three looks at the employment of professional judgments in practice. It is divided into three different aspects, accounting recognition, measurement and reporting. Problems and possible reasons of making professional judgments are explored in chapter four. At last, counter-measurements of how to improve professional power are recommended in chapter five. It aims to help accountants increase rationality of their judgments.