Empirical Research On Accrual Anomaly Of Pre And Post Implementation Of New Accounting Standards

The promulgation of the New Accounting Standards is to improve the quality ofaccounting information, which starts from strengthening the supply of financialaccounting information to make a more rigorous and more scientific requirements forthe disclosure and generation of financial accounting information. That is importantfor investors to obtain higher right to know the financial and accounting information.With the depth and the continuous development of the discipline of the study offinancial theory, it was discovered that built by the investors in the securities marketactual investment behavior and modern financial theory model is not completelyconsistent. The Accrual Anomaly comes from differences between the current cashflow and accounting earnings under the accrual basis of accounting. As the earningspersistence of accruals in the accounting earnings is less than the current cash flow,when investors can not distinguish the difference between them, there will bemis-pricing for the investors’"function lock" on the gross earnings. And then therewill be arbitrage to be made by the invalid pricing of financial accountinginformation.This paper sees the New Accounting Standards issued in2006as a watershed in thestudy, taking2006to2002and2007to2011as two research phase. To find whetherthere is Accrual Anomaly during these two stages through the empirical analysis, andthus draw conclusions by comparative analysis of the new accounting standardsissued whether it is useful for the improvement of the quality of financial accountinginformation. The article firstly examines the differences between accruals and cashflow on earnings persistence, then finds that the cash flows have significantly higherability on forecasting the future earnings than the accruals. By drawing the Mishkinrational expectations hypothesis testing on arbitrage, we find the Accrual Anomalydisappear with the promulgation of accounting standards by the comparative analysisof the results of a two-stage.