The Impact Of Accounting Standard For Business Enterprises On The Business Credit Rating

On February 15 , 2006, the Ministry of Finance publiced the Accounting Standard for Business Enterprises ,which would be taken on effect in listed companies on January 1 , 2007. With the adoption of the new accounting standard, the credit estimation of listed companies may be changed. By analyzing credit models and credit empirical researches through or out of our country based on the accounting financial data ,we find that the Z-Score model ,based on the Multiple Discriminant Analysis(MDA), can discriminate ST companies and none ST companies better. By analyzing the difference between the new accounting standard and the old accounting standard, we point that the introduction of Fare Value measurement and the changes of the individual subjecs affect Balance Sheet or Profit Sheet, which will affect the financial ratios of listed companies. With the two parts analyzed above as the theoretical basis of the empirical research in this paper, we make Multiple Discriminant Analysis for the given listed companies and get the MDA model under the old accounting standard's condition. When we use the MDA model under the old accounting standard's condition to estimate the credit risk of the same samples with new financial ratios, which are adjusted by the adjustment items in the financial report of year 2006, according to the new accounting standard, we find the worse discriminant. The financial ratio of the ST listed companies taken as none ST listed companies by wrong is higher. If financial institutions still adopted the MDA model under the old accounting standard's condition in the new condition, they will undertake more default risk of the chosen company. At the last part, we give the new MDA model under the old accounting standard's condition.