Research On Financial Restatements Caused By Changes In Accounting Policies And Accounting Estimates

Changes in accounting policies and accounting estimates may easily used bymanagement as a means to whitewash accounting information, and therefore may leadto accounting errors and financial restatements. Making a special research for suchfinancial restatements can provide more guidance to curb the abuse of changes inaccounting policies and accounting estimates, to improve the quality of accountinginformation in capital market.This paper is consisted of five chapters: the first chapter makes an introduction offinancial restatement research; the second chapter makes an introduction of relevanttheory of financial restatement, and make a comparison of changes in accountingpolicies, changes in accounting estimates, and financial restatement; the third chaptertries to interpret forming reasons of financial restatement of changes in accountingpolicies and accounting estimates; the fourth chapter provides some real examples; thelast chapter makes a conclusion of the paper.This paper has come up with the following conclusions: First, number of financialrestatements caused by Changes in accounting policies and accounting estimates is farless than the other financial restatement is due to the discovery of abuse changes inaccounting policies and accounting estimates is more difficult; Second, without specialpurpose, management will not take the initiative to restate abuse of changes inaccounting policies and accounting estimates, including the other financial restatement;Third, compared with other accounting errors, changes in accounting policies andaccounting estimates require higher levels of professional judgment, to provided anexcuse for "audit conspiracy"; Fourth, changes in accounting policies and accountingestimates have too internal information, and it costs more to determine the abuse ofaccounting policies and accounting estimates than other accounting errors; Fifth, whenthe external supervision cannot effectively detect the abuse of changes in accountingpolicies and accounting estimates, management tend to use such means as otheralternative accounting errors, which will be a greater harm on the quality of accountinginformation in capital market.