Discussions To Problems N Accounting Principles From Perspective Of Transaction Cost

Accounting is one of the branches of economics and the basic hypotheses are the same both in economics and accounting. So better understanding of accounting requires the application of the tools of economics, such as "Transaction Cost Theory"(TCT). From transaction cost perspective the dissertation explains formulation and modification of accounting principles.Transaction cost which is the cost relating to institution is the most basic and important definition in "New Institutional Economics"(NIE). Changes of transaction cost lead to modifications of institutions. So as one type of institutional arrangement, there are close relations between accounting and transaction cost. From perspective of TCT the author analyzes the birth inbeing and criterion of accounting principles. The points mentioned above pave the way for the author to analyze the modifications of objective formulating institution of accounting principles and accounting regulating system in our country.The author makes numerous empirical and subjective arguments toward the points above, the aim of this essay is establishing a concept: the objective of birth inbeing and modification of accounting principles is to reduce transaction cost. So in order to optimize the allocation of resources, the formulation and modification of accounting principles in our country must follow the rule of reducing the transaction cost.