A Research On The Relationship Among Payment-based Share, Qualitof Accounting Information And Company Value

Ever since this century, a system of share-based payment has been overspreadglobally. This is especially the case in those developed countries who treat share-basedpayment as an indispensable and effective method for a company to improve investmentenvironment, enhance economic foundation and inspire their employees. According toAsymmetric Information Theory and Signaling Theory, staffs in the company have moreinternal information than those share holders. When the staffs are pursuing themaximization of their own benefit, they tend to manipulate the information or offer falseinformation, which will in turn influence the accounting quality. In order to avoid thisfrom happening, offering those senior managers certain portion of company share maystop them from doing something immoral, which may improve quality of accountinginformation. Share-based payment system may not only influence quality of accountinginformation, but also be of great significance in improve the public confidence incompany stock and company value. However, this system is still young in China, andwas postponed by financial crisis. The positive aspect of this system is still not shown inpresent China. Therefore, it is of great importance to study the share-based paymentsystem at this stage and the reasons that listed companies have not adopted this systemactively. This paper will analyze the actual result of share-based payment systemapplied in current stage based on the relativity of share-based payment system andquality of accounting information, share-based payment and company value.The data in this paper is A-share of listed companies in Stock Market in Shenzhenand Shanghai from2009to2010when the political policy is stable. We will apply thesedata to analyze how share-based payment will influence quality of accountinginformation and company value. First of all, this paper provide a sufficient theoreticalfoundation for empirical study based on the theoretical researches on confirmation ofshare-based payment measurement, features of quality of accounting information andpattern of manifestation of company value, and Contract Incompleteness Theory,Asymmetric Information Theory, Beyond Property-Right Argument. What’s more,together with those theories, data of A-share listed companies from2009to2010inChina, and six assumptions related to share-based payment, quality of accountinginformation and company value, we come to the following conclusions: there is no remarkable influence to the quality of account information by improve the seniormanagers’ share; equity structure affects the quality of accounting information; the morea company is connected to trade, the more they tend to decrease the quality ofaccounting information when they adopt the method of share-based payment;share-payment through basic earning per share affects negative correlation in companyvalue; increasing the portion of senior managers’ share through share-based payment isof negative correlation with company value; share-based payment will influence stockprice which will influence company value negatively. This paper also analyzes reasonsfor those conclusions.Last but not least, limitations and suggestions for further study have been presented,and policy suggestions to improve share-based payment system for current situation inChina have been raised, all of which are based on those conclusions, analyzed reasons.