System Causes Distortion Of Accounting Information, Analysis And Countermeasures

Accounting information distortion therefore is worth studying, its basic premise lies in the value of accounting information. In the open market economy, the accounting information becomes more and more important so that there are continuously new problems relevant to the quality of accounting information which need to be discussed. This paper's innovation place lies in connecting three types of accounting information distortions with the three compositions of the accounting institution. This paper is divided four parts; each part's content is briefly introduced as follows: The first part "the overview of accounting information distortions", first introduces present situation of Chinese accounting information quality, then defines the distorted accounting information as a kind of information which doesn't reflect the real economic activities, or doesn't reflect the truth of the economic activities. In this foundation, according to the information production process and different reasons for the distortions, the accounting information distortions are divided into the regularity distortions, the contrary distortion and the technical distortion. Second part "the economic analysis to accounting institution", is the basement and the initial station of this paper's analysis. This part first explains the institutional economics about the general theory of "institution", points out the institution is the combination of rules which restrain people's activities by informal restraints, formal restraint and the implementation mechanism. The institution's functions include reducing transaction cost, promoting cooperation, providing stimulus, and suppressing opportunism behaviors. As applying the general theory into accounting, the accounting institution refers to the combination of rules, regulations, laws and moralities, which can restrain accounting activities. The same as the general institution, accounting institution is also made up by three constituents: accounting ethic (informal restraints), accounting rules (accountant standards, accounting system and so on, namely formal restraints), and legal system (accounting law, securities law...