Regulation And Improvement Of Financial Accounting Principal-Gent System At Village Level

Financial accounting principle-agent system has been proven to be a very effective financial management system at Village level after the practice in the recent decade. By summarising empirical experiences and studying structure of relevant regulations, theories including legitimacy, game theory, specialisation theory and motivation theory have been proposed lately. After a brief review of the current research outcomes, this paper proposes a number of ways to improve the financial accounting principle-agent at Village level through reviewing of the historical evolution of regulations, considering flocculation in realistic factors and case studies. This paper examines the trend in evolution of the Financial accounting principle-agent system at Village level, and thereby re-evaluates the two representative principal-agent systems, namely the single agency system and the dual agency system. It is realised that both the social environment and the application of theories are now dissimilar to when the practices were first practiced. The internal structure of the regulations is experiencing a dramatic transformation, and as a result is necessary to be adjusted and improved. Therefore, this paper examines the principal-agent system employed by Villages under Zhenhai District, analyses and evaluates details of regulatory improvement and its practical outcomes. It is recognised that regulating responsibilities, detailing processes, eliminating system loopholes and improving multi-level regulatory including financial auditing, democratic financial management are crucial to regulatory advancement of the financial accounting principle-agent system. At the same time, by utilising modern economic variables and system performance concepts, the paper discusses the results of implementing such regulations, rises issues such as blind sports in regulation, lagging effects in the principal-agent system, employing accountants and management of Villages in city region. In the end, aiming at the existing problems, this paper examines the practice employed by Luotuo District and Zhenghai District, suggests that the key to improving the financial accounting principle-agent system at Village level is to perfect assessment mechanism, strengthen management of Village leaders, agent accountants and financial management villager group, and thus optimise the regulation of the principle-agent system, build scientific assessment mechanism, raise the overall standard of principal-agent system, and promote the healthy development of democratic financial management.