Research On The Effect Of The New Chinese Accounting Standards

The new China's Accounting Standards (CAS) went into effect in the listedcompanies since Jan 1st,2007.The new CAS accords with the internationalaccounting convergence and the economic environments of China.Furthermore,thenew CAS is widely approbated in the world and is high-quality.What have the newCAS brought to us? This question is received much more concern and is the purposeof this dissertation.Firstly,this dissertation uses normative research methods toanalyze the related questions,such as accounting information disclosure,accountingregulation theory,accounting standards and the influence of accounting standards oncorporations and capital market,etc.The analysis illustrate that high-qualityaccounting standard is the most important guarantee for high-quality accountinginformation.And high-quality accounting information leads to the more effectiveresources allocation and the reduction of the cost of capital.In addition,high-qualityaccounting information can help the management to make investment decisions.Secondly,it tests that whether the reliability and relevance of accounting informationis increased and the cost of capital is decreased after the implementation of the newCAS through empirical studies.As fair value is one of the distinctive features of thenew CAS,this dissertation also pays attention on the incremental information contentof fair value.In the first part of the empirical research,it manifests that the reliability andrelevance of accounting information is increased after the implementation of the newCAS through the relative association studies,and three items ('fair value gains andlosses','trade's financial assets' and'available-for-sale financial assets') have theincremental information content.In the second part of the empirical research,it usestwo kinds of methods (direct-estimating method and indirect-estimating method) toestimate the cost of capital.It is proved that the cost of capital is decreased after theimplementation of the new CAS through univariate tests and multiple regressionanalysis.The conclusions of this dissertation are meaningful not only for the newCAS but also for the international accounting standards literatures.In addition tonormative research methods,this dissertation uses empirical research methods.Besides the value relevance research,it uses the cost of capital as the benefit of the implementation of the new CAS in the part of the empirical tests.The former is thetraditional method of accounting standards research.But the latter utilizes the researchresults of economics and finance,and it may give more insights about accountingstandards.The main insufficiency of this dissertation is that it can't tell the changes inother institutional factors,which happened during the research period,whether havean important effect on the results.