Accounting Integrity Contract

Although the problem of accounting integrity flaw and information distort in capital market caused the scholar and the correlation department long-time attention and exploration, but to the present situation, it is still a difficult problem which far from being solved both in theory and practice. Most of present researches are focus on the reason and resolution from exterior accounting system and internal company governance. This limitation inevitably causes the analysis confined on the surface and can't grasp the in-depth essence of the problem, so thorough research is need for it both in theory and practice .In the generalized field of contractual economy view, we regarding accounting integrity as a contract signed by enterprise's factor owners, the problem of accounting information distort turns to whether the contract can be efficiently fulfilled. This thought directs us a new point of view for the analysis of accounting integrity. Using the analysis thought of contractual economic theory, the paper deducted the basic reason of the accounting integrity contract exiting in the enterprise, constructed the theory framework of accounting integrity contract, and analyzes the implementation way of accounting integrity contract from theory to practice. The content and research path of the paper is launch along the following logical thought.Enterprise is a nexus of contracts. According to contractual character, the inner contracts of a firm may be divided into two parts: one is transaction contract of using right of elements, the other is accounting contract. The former one decides the firm's inner organization structure of element factors and management of the firm's ownership, and finally decides the sharing state of a firm's claim to residue. The later deters the residual measurement methods of a firm. Contracts are all incomplete. The incompleteness of transaction contract of factor's using right lies in administrator sharing the right of claim to firm's residue, the incompleteness of accounting contract lies in administrator having the right of deterring residue accounting rules. The condition of administrator both enjoying residual claim and controlling the rules to measure the residue, other owners of the enterprise would worry about the contractual benefit were harmed for incompletely contract, and thus they wouldn't join a firm. But the fact is nobody paying enough attention to the possible conflict when the joint to a new firm. We call this contraction "firm's incomplete contract paradox".The research on this paradox has drawn out the analysis on the basic theoretical...