A Study On Contracted Incentives Of Accounting Policy Changes

For assuring the comparability and fairness of accounting information, avoiding uselessness and misleading of accounting information by unchangeable accounting policy, Accounting Principles allow enterprise can have voluntary accounting policy changes. But sometimes some companies just satisfied with their demand for benefit by voluntary accounting policy changes, especially for listed company. The right of accounting choice creates the conditions for reflection of economic substances, simultaneously, supplies the opportunities of operating accounting earnings. Watts and Zimmerman give us the three hypothesizes of economic incentives: Compensation contract hypothesis, Political cost hypothesis, and Debt contract hypothesis. This paper wants to study and analyse the contracted incentives of voluntary accounting policy changes.In this paper, 129 listed companies, which had the voluntary accounting policy changes during 1998-2002, were chosen as our sample. We studied on the contracted incentives of the voluntary accounting policy changes of our listed companies by the paired match of our research sample firms and the control sample firms, and then through the mean T-test and logistic regression models to test if the differences between the two sorts of company have the distinctness. Our research results include that the voluntary accounting policy changes has a negative correlation with the compensation contracts and the tax. At last, we give some suggestions for control the accounting policy changes.