Category: Money tips Release Date: 2006-02-18
Shangzheng Bao, "Annual Report Q & A Group":
Beginning in 2007, listed companies will implement the new accounting standards system. Why? It will have any effect on the capital market?
Shanghai Chen
Chen:
February 15, 2006, the Ministry of Finance issued, including a basic standard, 38 specific standards and guidelines related to application of accounting standards constitute the new enterprise system in which the new accounting standards will be January 1, 2007 at listed companies the implementation of other businesses to encourage the implementation. The system of accounting standards issued by companies to achieve convergence with international practice and establish a more scientific elements of a sound accounting recognition, measurement and reporting standards system. In general, for improving the transparency of our accounting and enhance the international competitiveness of China's capital market of great significance.
1, why is that the new system, the establishment of accounting standards will help improve the transparency of accounting
Accounting transparency is a quality of accounting information on a comprehensive, integrated concepts, including the formulation and implementation of accounting standards, accounting information quality standards, information disclosure and supervision, are a comprehensive set of accounting information quality standards and to conduct a full accounting information quality management toolbox. Accounting transparency includes the following three meanings: (1) there is a formal, clear, accurate and easy to understand and generally accepted accounting principles and related accounting information disclosure system of monitoring system, all of the accounting standards and accounting information disclosure regulatory regime is to coordinate consistent; (2) to be strict compliance with accounting standards; (3) provide high-frequency external accurate information, so that outside investors, creditors, regulatory agencies, to facilitate access to the financial position, operating results, cash flow and business risk level of information.
Contract theory that business is a series of contractual link. Existence of the business to maintain a variety of contract signing, implementation and oversight, to a certain extent, to rely on accounting information. In these leases were signed, implementation and oversight of the process, the information asymmetry widespread. Owner worried operators will adopt the "opportunistic" behavior to the detriment of their interests, in an efficient market, the operators in order to maintain their position, they must be taken to make the client to believe that he will not take "opportunism" behavior mechanisms. In order to win the trust of owners, they have the initiative to provide accounting information to enhance transparency, reduce the motivation level of accounting information asymmetry. Historical facts indicate that the widespread adoption of financial accounting information disclosure system, that is the result of this institutional arrangement. In order to ensure the operators provided by the credibility of accounting information, businesses will hire an independent professional audit of the CPA. Of course, the high accounting transparency may adversely affect the enterprise, including higher costs of information disclosure and potential liability risk, the result of owners and managers are there to reduce the transparency of accounting information, and even provide false information to fraudulently market confidence of the profit motive. Because of this, market arrangements are not automatically achieve high accounting transparency.
Therefore, the establishment of a convergence with the international practice of accounting transparency of accounting standards is a high basic content of the establishment of new accounting standards system is to improve our accounting transparency is undoubtedly a major step.
2, the new accounting standards system in China's capital market will help boost the international competitiveness of
Through greater transparency, will help companies discover the true value and recognition of the market, reducing its running in the market a variety of costs and risk. PricewaterhouseCoopers in January 2001 issued a report on "opaque index" survey study found that a country (region) of the transparency of its cost of capital, there is a direct relationship between greater the transparency of its cost of capital lower.
From the international point of view, as the transnational flow of capital, the gradual reduction of artificial barriers to international capital flows faster and faster. The profit-driven cross-border flows of capital the primary motive, an opaque market, its attractiveness to international capital is relatively low, the market access of transnational capital costs are relatively higher. From this point of view, since the new system, the establishment of accounting standards, accounting, increased transparency will help to enhance China's capital markets, international competitiveness.
The realization of a high transparency of accounting is a process, the new system for the establishment of corporate accounting standards is the provision of accounting information have a high degree of transparency possible.
