The Study On The Relationship Between The Accounting Policy Changes And Stock Price

With the development of economy,the increasingly complex operating environment and fierce market competition. In order to survive in the intense environment, there is existence the behavior of using related party transactions to earning management,and thus achieve the purpose of beautification statements. In recent years, with the strengthening of supervision, many listed companies will transfer their focus from related party transactions to the accounting policies,that change in accounting policy.Check the listed company’s annual report, we found that enterprises are mostly based on the following changes:(1) the legal and regulatory requirements;(2) business requirements;(3) In order to improve the quality of information.Due to the changes in accounting policies exist a lot of subjective and is difficult for outsiders to judge the reasonableness of their behavior, the study of changes in accounting policy has got people’s attention.Base on the Market Efficiency Theory,an efficient capital market should be the center of the convergence of information.After accepting the new information,the market will reflect it to the stock price. Event studies are used to measure the effect of an economic event on firms’market value. The method is based on the the normal income calculation model as its core tools.Considered the previous studies using the market model to calculate the normal yield,therefore,in this paper we also apply it.We choose the company which exist the change in accounting policy in the2010Annual Report as the samples.In the study,we found the market has a positive response to the changes, and bring speculators abnormal returns, but in the long run, the event will not bring any non-normal returns to investors. We also found in different industries and regions the impact of the change in accounting policy for the stock prices is insignificant.Grouping by the impact of performance,we found the significance level of0.10,[-10,5] days cumulative abnormal returns have significant differences, this incident change in accounting policy differences impact on the performance of different companies.