Accounting Standards In China Research Articles

Revisions about Government Subsidy Disclosures and Investors’ Response to Earnings Reports: Evidence from the 2017 Government Subsidy Disclosures

We examine whether the quality of information in earnings reports, as indicated by the earnings response coefficient (ERC) decreases when the measurement and disclosure of government subsidy has been changed by revising accounting standards. According to the old accounting standards in China, the gains from government subsidy should be reflected in “non-operating” income. However, the newly revised accounting standards regulates that a part of government subsidy can be reflected in the report item of “other income” in under the operating income item. We use 2017 revisions of accounting standards in China as an instrument to capture a change in the position of financial statements where the government subsidy is revealed. Employing a difference-in-differences design and exploiting the adoption of the new accounting standards, we find a statistically and economically significant decrease in ERC for treated firms relative to controlled firms. Our findings represent the first empirical evidence that the change of government disclosures can negatively affect the information content of earnings report.

The Relation between Initial Returns and Audits by the Big Four Accounting Firms

This paper mainly explores the relation between initial returns and audits by the big four accounting firms (the Big Four) in China. The sample period is from January 2007 to December 2012 (the new accounting standards in China is implemented after January 2007 for integrating with the international standards), and selected 1,069 IPO firms listed in the Shanghai Stock Exchange and Shenzhen Stock Exchange in this paper.Many previous studies have proposed the Informational Hypothesis, which states that the initial returns of IPOs being audited by the Big Four are lower than those IPOs being audited by other accounting firms. Oppositely, this paper proposes the Snap-up Hypothesis due to consider the IPOs in mainland China are characterized by “three lows,”: the low reliability of audits being performed by non-Big Four, low proportion of IPOs audits being performed by the Big Four, and low balling ratio. These “three lows” features indicate that the Snap-up Hypothesis applies in the IPOs market of mainland China. In other words, the initial returns of the IPOs being audited by the Big Four are higher than those IPOs being audited by other accounting firms due to the Big Four have the superior reputations.This paper further collects the trading volumes and the turnover ratio on the first day, and selects the Big Four audited IPOs by snap-up tide. As above mentioned, because the snap-up tide and raised stock prices on the first-day listing, investors may purchase the shares when offering and sell them on the first-day listing to obtain considerable profits.

The Impact of Fair Value Accounting on Corporate Disclosure

Abstract This paper examines the impact of fair value accounting on corporate disclosure after the implementation of the new accounting standards in China. We find that the frequency of management forecasts increases significantly for firms affected by fair value accounting. Further analysis reveals that this relation is more pronounced for forecasts issued after the fiscal period end and for forecasts conveying bad news. Our study provides new evidence about the economic consequences of the new standards. In addition, we explore the determinants of management forecasts from a standard-setting perspective, which contributes to the line of research on corporate disclosure.

중국의 국제기업회계기준 공정가치의 가치 관련성 분석

본 연구는 중국의 국제회계기준 도입으로 나타나는 회계정보의 유용성을 분석하기 위해 상해증권시장의 자료와 심천증권시장의 자료를 이용하여 연구 분석 하였다. 또한 본 연구의 객관적 접근을 위해 관련 선행연구를 종합하여, 본 연구의 연구모형에 맞게 수정 조정하여 가설을 설정하고 실증분석을 토대로 가설을 검증 하였다. 본 연구에서는 공정 가치를 도입한 기간 전후를 통해 공정가치가 기업의 가치 관련성에 영향 관계에 있는지를 분석하기 위해 세부적인 대별 변수를 투입하여 가설을 검중 하였다. 가설 분석에서는 공정가치 평가를 도입한 기간이 상대적으로 회계정보의 질에 영향을 미치는 것으로 분석 및 추정 될 수 있었다. 이러한 결과는 기업의 주당순자산가액과 주당순이익과의 관계에 있어서 가치 관련성이 유의한 수준에서 영향관계에 있었기 때문이다. 따라서 향후 연구에서는 공정가치의 평가방법이 기업의 가치 관련성에 영향을 줄 수 있는 주요한 관련변수로 논의될 수 있을 것으로 기대된다. This study is analyzed using the Shanghai stock market and Shenzhen stock market data in order to analyze the usefulness of accounting information to appear from the introduction of international accounting standards in China. Summarized the relevant previous researches for objective study approach, studied the hypothesis based on the empirical analysis and set a hypothesis as adjusting the stuffs to fix in this research model. In this study, Analyzed the hypothesis to input of detailed variables for analyzing the value relevance between periods before fair value and after fair value. Also, in this hypothesis study, analyzed and estimated to affect the quality of information the acceptant period when compare with acceptant periods and before periods of fair value. These results suggested that impact the net asset value per share and earnings per share of the company because the value of the relationship had statistically significant at the level of relevance. Therefore, in the future studies about fair value assessment, will be expected that usefulness of the enterprise value evaluation method enable to discuss it such as critical sucess factors.

Profits and losses from changes in fair value, executive cash compensation and managerial power: Evidence from A-share listed companies in China

According to optimal contracting theory, compensation contracts are effective in solving the agency problem between stockholders and managers. Executive compensation is naturally related to firm performance. However, contracts are not always perfect. Managers may exert influence on the formulation and implementation of compensation contracts by means of their managerial power. As fair value has been introduced into the new accounting standards in China, new concerns have arisen over the relationship between profits and losses from changes in fair value (CFV) and levels of executive compensation. In this study, we find that executive compensation is significantly related to CFV. However, this sensitivity is asymmetric in that increases to compensation due to profits from changes in fair value (PCFV) are higher than reductions to compensation due to losses from changes in fair value (LCFV). Furthermore, we find that managerial power determines the strength of this asymmetry.

The reform of accounting standards and audit pricing

This paper focuses on the reform of accounting standards in China in 2007 and investigates its impact on equilibrium pricing in the audit market. We find that the concentration of the audit market and the probability of issuing modified audit opinions do not significantly change, but that audit fees increase significantly after the adoption of the new accounting standards in China. Deeper analysis suggests that (1) the implementation of the new IFRS-based Chinese Accounting Standards (CASs) has increased the market risk faced by listed firms and thus auditors’ expected audit risk, causing an increase in audit fees, and (2) the degree of the increase in audit fees is positively related to the adjusted difference between net income according to the old CAS before 2007 and the new CAS after 2007. We thus conclude that the reform has had a significant impact on audit pricing in China.

A Study on Hedging Accounting Standards in China

A Study on Hedging Accounting Standards in China

A Study on Financial Instruments Accounting Standards in China

A Study on Financial Instruments Accounting Standards in China