Research On The Infulencing Factors Of Asset Retirement Obligations Of Disclosure

In the past three decades, resources consumption enterprises such as extractive industryhas been an important pillar of national economic system in our country. As problems ofenvironmental protection is increasingly prominent, more and more common people arerequiring enterprises in this sector to take their responsibilities in environment.“We muststrictly enforce environmental laws and regulations; crack down on those guilty of creatingillegal emissions and ensure they pay a heavy price for such offenses; and hold those whoallow illegal emissions to account, punishing them accordingly.” Premier Li Ke qiang pointedin Report on the Work of the Government in2014. His words truly reflects the governmenthas attached great importance to environmental protection. Both government and commonpeople are focusing on the environmental destruction during extractive production. However,the leftover environmental damage and recovering work afterwards to resources collectionreceived little attention. Confirming and disclosing asset retirement liabilities to enterprises’obligations is a sound method to measure how the relevant enterprises perform their duties onthe work of environmental restoration.On this context, this thesis, first of all, reviewing accounting principles on asset retirementobligation made by accounting associations in different countries and comparing theirdifferences and merits. On the basis of principal-agent theory, stakeholder theory, signaltransmission principle and combined with relevant scholars’ studies, a conclusion has comeout that there are many factors to the disclosure of asset retirement obligation and amount.They are enterprise scale, level of financial leverage, enterprise profitability, enterprisegrowth ability, audit quality, social contribution and ultimate controllers. Thus, the authorchose extractive listed companies in China from2009to2013to analyze their disclosures ofasset retirement obligation. And the situation in the last five years was as follows:(1)disclosures of assert retirement obligation in China’s extractive companies were generally lowwith only22.3%;(2) enterprise scale and audit quality and disclosure of assert retirementobligation and amount have positive correlation;(3) level of financial leverage, enterpriseprofitability, enterprise growth ability, social contribution and ultimate controllersdemonstrate a negative correlation to assert retirement obligation disclosure and its amount.Finally, improvements are suggested from the aspects of accounting standard making, lawsand regulations system, law enforcement in this sector and the quality of employees.