Comparative Study Of Conservatism On Pre And Post Implementation Of New Accounting Standards

The global financial crisis caused by the U.S. sub-prime risk makes more attention to the protection of investors' interests.Accounting information provided by companies is an important tool for the protection of investors.Conservatism as an important quality characteristic of accounting information plays a role in protecting the interests of investors.Accounting Standards, which regulates the generating process of accounting information, has a significant impact on the quality of financial statements of companies. This thesis tries to study conservatism on pre and post implementation of New Accounting Standards.The research samples consist of all listed companies in China of Shenzhen and Shanghai Stock Market from 2005 to 2008. The thesis applied methods like descriptive statistics and regression analysis to study three aspects of conservatism of Chinese listed companies: (1) Whether there existed conservatism from 2005 to 2008; (2) What effects does New Accounting Standards have on the conservatism of Chinese listed companies? (3) It analyzes the causes of conservatism of Chinese listed companies.The findings are as follows: (1) Conservatism of listed companies in China did exist from 2005 to 2008. (2) The implementation of New Accounting Standards reduced conservatism. (3) Conservatism manifested in the samples results from the manipulative behaviors of loss making companies.