Study On The Regime Of Corporate Accounting Information Disclosure In China

Corporate governance of a corporation relies on its developing information, so does the outside judgment to its operation situation. Information asymmetry between parties of a corporate transaction would on one hand lead to the non-objective judgments of the party receiving information, which finally results in adverse selection of market, on the other hand, a higher risk of opportunism actions of the other party with an advantage of information, which would end up with moral hazard. From this perspective, information disclosure in corporate arena should be valued substantially. Among this, accounting information concerning the financial situation of a corporation is of great value based on its specificity, especially in the context of PRC Company Law reform. The reform since 2013 signals a new era of this area. Due to the disadvantages of capitals credit, the ongoing Company Law is on its way to base its credit on assets rather than capitals. Since then, the credit ability of a corporate would no longer be represented by its capitals, but its assets. In this regard, accounting information which reflects the financial situation of a corporation makes sense in the smooth transfer of corporate credit basis.In this respect and with the purpose of assisting the revise mentioned above, corporations in China are required to disclose their information by way of annual report, instead of annual inspection used before, which means this disclosure should be made in an active way by corporations themselves. This for one thing requires PRC government to ease its involvement in corporate transactions by changing its regulation method, for another, imposes a big challenge on corporate governance in corporations themselves. However, the application of this newly-developed regime discourages its purpose. Based on its specific rules design, whether to disclose accounting information is entirely on the side of corporations themselves, which gives them sufficient excuse to omit; the messy regulation in information disclosure would severely affect its quality, and make the following potential accountability not easy to realize; the design of spot check rules alongside is not specific, which leaves doubt in their practicability and effectiveness; the terms of liability are not specific enough to deter stakeholders’ actions, which may not be helpful in relieving illegal corporate information disclosure. Based on these shortcomings in design of regime and reviewing its practical application, it is not difficulty to find that the application situation differs substantially among different administrative divisions, not to mention the great differences within these divisions themselves. All of these situations require a further perfection of present regime, as well as the establishment of pertinent measures of it, to guarantee a much more smooth application of this regime.With a relatively mature design of the similar regime in corporate arena, UK and Germany set a good example in regulation of corporate information disclosure which should be valued by our country. In spite of various differences in cultural and developing background, interior resemblance within the regime provides us with the justification to transplant the prevailing rules of this regime from these two countries. With the scanning of the pertinent rules in UK law and German law, information disclosure in corporate arena mainly refers to accounting information of financial situation in a corporation. Corporations are required to disclose their accounting information through annual reports during a specific period of time every year. Auxiliary rules or specifications pertaining to this process are also provided to guarantee it goes smoothly. In this respect, it is necessary to follow these rules to respond the current situation in corporate reform of our country. In brief, bearing in mind the necessity to disclose accounting information of a corporate, try to establish a regime of corporate information disclosure with multi-levels based on the various types of corporations, moreover, apply in a way both compulsory and flexible with regard to different situations. The assistant system within it should also assessed, and in this way to promote the smooth application of disclosure regime of corporate accounting information in our country.