The Effect Of New Accounting Standards On Value Relevance Of Accounting Information

The promulgating of the New Accounting Standards is a crucial measure to build and improve the China's accounting system. It also symbolizes a further step into the new milestone in our accounting standards system. This paper analyzes how the implement of the New Accounting Standards influences the accounting information value relevance. Based on the research, the author provides quantified evidence on whether the users of the relevant accounting information can benefit from the implement of the New Accounting Standards. In addition, this research has positive effects on evaluating the rationality of the new accounting standards reform, and also predicts the further direction of the reform. Through scrutinizing how the new accounting standards works in the capital market, the readers can see both advantages and disadvantages of the new standards, thus deepen the further development of the accounting reform.This dissertation includes three parts: the theoretical analysis, the empirical testing and the policy suggestions. In the first part, based on reviews the theoretical foundations of the Efficient Market Hypothesis and the Capital Assets Pricing Model, the author reviews two important paradigms: the information perspective and price perspective, and then briefly explores their relation. In the second part, this paper employs the earning model and price model to analyze the value relevance of accounting information before and after the implement of the New Accounting Standards, then tests whether the degree of the value relevance is advanced. Special attention has been made to the changes of the value relevance in cash flow. Another focus of this part lies in the question that whether the degree of improvement in value relevance will differ after the implement of the New Accounting Standards for those companies with different information disclosure qualities. The conclusions are as follows:①After the adoption of new standards, accounting information value relevance of the listed companies has been substantially improved. It proves that the accounting information becomes more useful because of the new standards.②In the earning model, the value relevance of operating cash flow has been raised since the adoption of new standards. However, this assumption has not been testified in the price model.③The operating cash flow can transfer the incremental information, on the basis of the surplus information. These two kinds of information differ not only in their content but also in their focus.④As has been testified, for the companies with higher rank of information disclosure, their degree of the accounting information value relevance are also higher than those with lower one. It demonstrates that the disclosure of the accounting information plays a positive role in improving the value relevance of accounting information.⑤The research shows that for the companies with lower rank of information disclosure, the degree of advancing will be much greater in the accounting information value relevance.In the conclusion part, this paper provides some suggestions and policies related to this issue based on the empirical researches. At last, the direction of further research has been pointed out as well.