Research On Conservation Of Listed Company Accounting Policy

Since the early 90s of last century, China established the Shanghai Stock Exchange and Shenzhen Stock Exchange, the Chinese A-share market and the strong attractive emerging markets closely linked. Along with the deepening of globalization, and China's capital market continuing to open up, A-share market is increasingly becoming the target of concern to global investors. Even if the access of market restrictions, derivative products closely related to A-share market have appeared in various markets.(such as Hong Kong and the U.S.market).As a representative of emerging markets, Chinese A-share market have the characteristics of emerging markets inevitably。Compared to mature markets, the price of emerging markets has become more frequent and intense.With the constant changes in the stock market, the conservation choice of accounting policy varies from time to time. For example, enterprises choose a more firm accounting policy in a period of time, while they choose a relatively aggressive accounting policy in another period. What caused the change in accounting policy? What is the intrinsic link between them?In this article, We analysis how the fluctuation of China's stock markets affect the investment and financing behavior, and thus how it affects the conservatism degree of corporate accounting policy choice in a dynamic point. According to empirical evidence, the cyclical nature of China's stock market leads to listed company choose different accounting policies for financial purposes, and then demonstrate the conservatism characteristics with the stock market cycles, that is, on the departure of the stock market, the conservatism of corporate accounting policies become weakened, while in the downlink period of the stock market, the conservatism of corporate accounting policies turn to enhanced.This paper divided into five chapters, and the basic structure as follows:1.Introduction.This chapter focuses on the research background and significance of this article, writing ideas, research methods, as well as the basic framework, the innovation and shortcomings of this article primarily.2.Conservatism related theories.We introduced the definition of conservatism both from practice and evidence part, studied the robustness of the current discussions on the accounting measure systematically, focused on analysis the cause of accounting policy choice and institutional background.3.Research hypothesis and research design. This hypothesis put forward to test the model, and describes the measure of each variable means.4. The empirical research results and analysis of conservation of listed company accounting policy.According to analysis the 1998-2008 A-share market financial data, we draw two conclusions.First, the stability of the stock market down period was significantly higher than the stability of the departure, which means that listed company using the next departure is more stable than the previous accounting policy. Second, the choice of accounting conservatism to China's listed companies affected by the financing needs in large part.5.Conclusions. We made a series of policy proposals from the financing environment, demand for external audit and the most robust of investors, focused on the problems which identified by empirical research institute with China's actual situation, in order to benefit to the stability of China's listed companies and the normative choice.Innovations of this article are reflected in the following three aspects:First, this paper studies the conservatism of the changes in China's stock market in a dynamic perspective. This paper introduces the stock market cycles and the BB analytical methods which based on the stock market cycle partition method to determine China's stock market down or up objectively, and benefit to dynamic analysis the relationship of China's stock market' volatility and the change of accounting Conservatism policies.Secondly, from 1998-2008's data, this paper found that the relevant factors' dynamic role in accounting policy choice, that is the management of listed enterprise will adjust the accounting policies according to different market environment in order to achieve financing purposes.Third, this paper based on the conclusions of the management of listed enterprise and adjust the accounting policies according to different market environment in order to achieve financing purposes, proposed policy recommend-dations:starting from the external environment, realize the listed company diversification of financing, give full play to the independent audit of the external oversight role in ensuring rightly using the robustness of accounting information, to improve the quality of investors and enhance the stability of demand.