Research Of Correlation Between Fair Value And Earnings Response Coefficients

The highlight of new accounting standards is the introduction of fair value. Meanwhile the capital market surged over in the past three years, these impacts all have effects on the quality of accounting information. Under the condition of prevalence of earnings management behavior in the market environment, there are lots of measure standards of quality of accounting information. The most comprehensive and representative way shall be the earnings response coefficients. Therefore, the object of this paper is to find out the relationship between fair value and the earnings response coefficients.This paper takes listed corporate on finance, real estate, and manufacturing as the research samples, to compare the significance of the data model while consider the impact of fair value with not consider the impact of fair value. In order to obtain the results of relationships between fair value and earnings response coefficient in different industries. Meanwhile, select all listed companies whose sound value flexible loss and profit are not zero as study samples, then divides those samples into different areas according to different rations of fair values divides the operating profit. We use mathematical models to process those data to reach the relevance of fair value and earnings response coefficients on different areas. The main Data processing method used in this paper is linear regression methods, there is also includes the analysis of data description results. Compare the samples of same industry in different years, or compare the data of samples of different industries in the same year data, so as to find out the conclusions.This study showed that the relationship between fair value and earnings response coefficients is different in different industries. Negatively related in the financial industry and manufacturing industry, while in real estate industry the correlation is not strong. In the region of ratios of fair values and operating profit near zero in all listed companies, the smaller the ratio, the more significance of the model, which shows the fair value and earnings response coefficients are Negatively Related.