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Research On The Influence Of The Changes Of Accounting System On Conservatism In China

Posted on:2011-05-06Degree:MasterType:Thesis
Country:ChinaCandidate:N FengFull Text:PDF
GTID:2189360308954223Subject:Accounting
Abstract/Summary:PDF Full Text Request
Earnings conservatism has always been an important quality characteristic of accounting information, and played an important role in the formulation of the systems of accounting. However, the number of empirical research on accounting earnings conservatism is still relatively small. The empirical research on accounting earnings conservatism abroad has lasted only 10 years, and in our country the research starts much later.With accounting earnings conservatism as an entry point, this paper tries to reveal the relationship between earnings conservatism and accounting system. In the past ten years of accounting institutional reform, accounting earnings become more and more important, and has become an important reference in the process of investors'decision-making. This paper aims at making an analysis of the influence of accounting institutional changes on the accounting earnings conservatism through empirical research, hoping to accumulate some experiences for accounting institutional changes in our country.Based on this thought, this paper selects A-share listed companies of Shenzhen and Shanghai from 1995 to 2009 as study models and adopts Basu (1997) model to study the following two problems:1 Whether there is earnings conservatism in our accounting system?2 How does the accounting earnings conservatism change in the process of accounting institutional changes?The results show that (1) the conservatism of accounting earnings exists from 1995 to 2009; (2) the conservatism of accounting earnings in different stages is not the same. Thus this paper divides the accounting period into four stages: from 1995 to 1997 China initially adopts the principle of conservatism, but the conservatism of the accounting earnings is weak; from 1998 to 2000 the listed companies in China has increased the conservatism of accounting earnings, but the effect is not obvious; from 2001 to 2006 the conservatism of accounting earnings of listed companies in China increases rapidly, and the principle of conservatism becomes one of the important accounting principles; from 2007 to now, the new accounting standards don't improve the conservatism of accounting earnings, but decreased than the last period; (3) Although earnings conservatism can help investors to minimize the risk, it may underestimate the value of the companies and even lose many good investment opportunities.The significances of this paper are as the following: (1) this paper tries to analyze the influence of accounting institutional changes on the earnings conservatism and show the changes of earning conservatism in different stages. Owing to the special situation of our country, this study can provide some experiences of accounting institution for other socialist countries. (2) People have different opinions on the conservatism of accounting earnings. We can not say which one is right or which one is wrong, but we can get our own ideas through this research and provide some evidences to support my view. (3) This paper also has a great significance for securities market in our country. We make an analysis of financial statements and make a prediction of accounting earnings. The accounting earnings studied in this paper have certain predictive ability for stock prices. Though the accounting institution of our country is not mature enough, sometimes there will be actions of earnings manipulation, but it doesn't affect the important role of financial analysis and earnings forecast in our securities market.
Keywords/Search Tags:Earnings Conservatism, Accounting Institutional Changes, Accounting Standards Setting, Accounting Information
PDF Full Text Request
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