Empirical Research Of The Impacts Of Accounting Comparability On Capital Cost

Under the situation of China’s current system and capital market environment, the quality of accounting information and the cost of capital has become a hot issue of accounting academic, but so far, the reach on the accounting information mainly concentrate on the earnings quality,relevance,reliability,conservatism,etc.but the comparability of financial reporting.especially the difficulty of measuring the company’s financial reporting comparability, so the existing literature research that the comparability of financial reporting have an effect on the cost of capital has not yet discovered. So this article combine normative analysis and empirical research method make a deeply investigation and research on the comparability of financial reporting affect on the cost of capital.We first summarize the quality of accounting information, accounting information comparability,the quality of accounting information and the cost of capital based on the analysis of related literature.and then based on asymmetric information theory.accounting information quality evaluation theory.capital structure theory.we analyzed that the comparability of financial reporting have an affect on the cost of equity capital.debt capital.corporate capital.and then put forward empirical research hypothesis; then, based on the theoretical analysis.We select9370companies-annual sample from A-share listed companies in China during the period of2004-2013, and follow’ De Franco. Kothari and Verdi (2011) to measure accounting information comparability of every company, and follow with the Hou. Dr Dijk and Zhang (2012) modified PEG model of Easton (2004) and OJN model of Ohlson and Juettner-Nauroth (2005) to measure capital cost of equity, and absorb the experience of the research achievement by Lou、 Adams、 Pittman and Fortin to measure the cost of debt capital using three methods,and learning from the Solomon modern formula,use two models to measure corporate capital, then study the trend of financial reports comparability after the implement of the new accounting standards in2007, we also study the relation between financial report comparability and capital cost. This paper also adopted the Neel (2013) and Cascino et al (2014) accrued comparability measurement model of the robustness test respectively.We find that the financial report comparability has been showed a upward trend after the implementation of new accounting standards in2007.In the case of controlling for other factors, financial report comparability did have a significant negative impact on the equity capitaL，debt capital,corporate capital.At last, the article put forward some advises.for example, improving the relevant accounting laws and regulations, establishing and improving accounting supervision system, fostering managers market to improve the quality of accounting information according to the result of empirical analysis.