Research On Ultimate Control, Institutional Environment And Motives Of Accounting Policy Choice

This article, based on the background of Non-monetary Transaction Standard's enactment and revision, analyses economic motives of accounting policy choice carried out by listed firms during 2000-2001 combining the ultimate shareholder and institutional environment. We find that there is no remarkable influence on the application of Non-monetary Transaction Standard among listed firms with different kinds of ultimate shareholder. In contrast, the proportion of ultimate control and institutional environment are very important variations for the accounting policy choice. The higher level of the proportion of ultimate control an enterprise has, the more probably it will adjust the profit by non-monetary transactions, but the improvement of institutional environment can reduce the negative influence.At the same time, our examination result indicates that, in China, the motive of accounting policy choice by using non-monetary transaction is because of"Rights-offering Purpose, Loss-reverse Purpose and ST Purpose". In addition, there is little discrepancy of the practicing effect of this new standard between government and non-government controlled firms, and the modification of the standard reflects justice.