Analysis Of The Framework Of The Regulatory Accounting For The Power Grid Enterprises

As the development of the regulatory theory and the deeper marketization reform of monopoly industries, the regulatory accounting as a new accounting discipline has developed rapidly. British and the United States established relatively integral frameworks of regulatory accounting theory, set up special regulatory agency and developed the guidelines of accounting standards which have legal effects, allowed regulatory agencies supervise the financial accounting by auditing, to ensure the authenticity and objectivity of accounting information. Regulatory agencies and other stakeholders obtain true accounting information of monopoly industries, then they can regulate the price, cost and other economic factors of monopoly enterprises, therefore the financial information of management and the industry can be improved,as well as the consumer interests can be protected and the abuse of dominant position can be avoided.Because of natural monopoly of China's power grid enterprises,information asymmetries are inevitable.Power grid enterprises know their own operating conditions and cost levels,which regulatory agencies don't have.In order to maximize their own interests,a rational grid enterprise will not report their true cost information,instead of making a false report on the cost which will benefit themselves.Distortion of accounting information will lead to the loss of consumers and social welfare. Hence, it is necessary to regulate the power grid enterprises to standardize the disclosure of accounting information.Regulatory accounting of power grid enterprises becomes an inevitable trend.However,regulatory accounting theory and practical application is still in its infancy,most scholars considered regulatory accounting as an integrated application of accounting management and methods,thus ignored the theoretical framework of regulatory accounting.Based on the theory of regulation economics and financial accounting, this paper discusses on the regulation accounting of power grid enterprises in China. From the perspective of regulatory agencies, this paper analyze the basis of regulatory accounting theory, expounded the theory of the whole system, including the regulation objectives, basic assumptions , principles of accounting elements and the account settings, and finally disclosed the accounting information by regulation reports.Combined with the specific characteristics of China's power grid enterprises and the focus point of the regulatory agencies, this paper analysis the framework of regulation accounting for China's power grid enterprises.