Study of the Impact of Expected Credit Loss Model on the Quality of Accounting Information

Abstract

In 2017, the Ministry of Finance issued a new standard on financial instruments to achieve convergence with international accounting standards, in which the emergence of expected credit loss model has great significance and far-reaching impact on the development of enterprises in China. In this paper, the impact of expected credit loss model on the quality of corporate accounting information is studied by using Differences-in-Differences method. Using accounting conservatism as a proxy variable for accounting information quality, this paper finds that the expected credit loss model can improve the accounting conservatism of enterprises. The findings of this paper show that the expected credit loss model is effective in improving the quality of accounting information, thus justifying the feasibility and necessity of implementing the new financial instruments standard and providing a good empirical basis for deepening the reform of accounting standards in China in the future.