Research On Accounting Policies Affect Earning Qualities

In2007Chinese accounting standards’development attracts worldwideattention, which means China capital market enter into a new stage. In2007accountingstandards achieve substantial convergence the international accounting standards. After theimplementation of the2007Chinese accounting standards, theory and practicesessions are both concerned about standards implementation effect, especially concernedabout wether and how accounting policies affect earnings quality. Earnings are the resultthat management use accounting policies to measure financial performance of enterprise.Stakeholder not only concern accounting earnings data size but is more concerned aboutthe earning qualities.To study the relationship between accounting policies and earningqualities can help us to deeply understand the economic consequences of accountingpolicies and the impact on earning qualities.Based on the domestic and foreign related literatures, using the basic principleof accounting, adopting the normative analysis and empirical analysis, qualitative analysisand quantitative analysis, the following several aspects of the research are:those：the firstis theory research, this part mainly based on review of the existing literature toestablish the theory model between accounting policy choice and earnings quality.thesecond is on the basis of theoretical analysis to describe the feature of accountingpolicy choice of every listing Corporation. Through the modified Jones model wemeasure the discretionary accruals. On the basis of the empirical model, this article studythe relationship between the accounting policy choices and earnings quality. Then Byusing the case analysis we revealed the lower earnings quality of this corporation becauseof its extreme increasing earning accounting policies.The third one is by usingmathematical and case analysis, we put forward reasonable principles and measurementsof listing Corporation, accounting policy should pay attention to the problem.Through the above analysis we find:(1) Reveals the present situation of theaccounting policy choice of listing Corporationand its relationship with earnings quality.In2007, the main tendency is choosing reducing earning accounting policies. accountingpolicy from extreme reduce profit gradually to intermediate value, the discretionary accruals decrease.(2)Through the ‘Jielong’case,we analysis its earnings quality andmotivation on accounting policies (extreme increasing earning).(3) According to thetheoretical analysis, mathematical analysis and case analysis we presented Chinese listingCorporation must choose conservative accounting policies and the reasonable suggestions.