The Study On The Price Changes Impact On Quality Of Accounting Information

Price changes denote that commodity prices up or down continuously and sharply in a certain period. Price changes follow the emergence and development of the commodity exchange. Price changes which is a general economic phenomenon in the Market-oriented Economy, it has certain impacts on truth and accuracy of historical cost accounting information, in conditions of price changes seriously, the function of financial accounting may be prevented in a large extent. Since 2003, there is a rising trend in our commodity price. Especially after 2007, CPI keeping up at a high level and price changes are challenging our accounting area. Price changes seriously affects the quality of accounting information reported by traditional accountings, such as serious distortion of accounting information reported in financial statements, chaos of financial distribution relations and financial situations and Enterprise's decisions errors and investments errors. And till now, this problem hasn't been solved appropriately. This paper is based on current researches and Chinese actual situations, introduce some external effective theories and practices about Price-changes. We study on the establishing and improving the model of price changes to reduce price changes impact on accounting information.We research the price changes accounting status, combine the theory of price changes accounting and accounting information, explain the traditional methods of reducing price changes impact. We point out the faults existed in current price changes accounting models, and then introduce the Double Price Index Model to improve current price changes accounting models. In the process of parsing financial statements, we consider about both general price index impact and special price index impact, this made financial statements closer to the real financial position.In a word, this paper developed the price changes accounting model to improve its accounting practices in the application and reduce the influence of price changes on the quality of accounting information by combining the theory and practice.