As the subject in national economy, it is very important that the clearness of the corporation must be emphasized.
To raise the problem caused various information contents that comes from accounting changes, this study examined the accounting choices...
As the subject in national economy, it is very important that the clearness of the corporation must be emphasized.
To raise the problem caused various information contents that comes from accounting changes, this study examined the accounting choices in many literatures.
In conclution, the bonus scheme, leverage ratio and political cost hypothesis were very often tested a s determinants of accounting changes.
The bonus scheme hypothesis is that a manager have the choice to raise the EBIT. This facts can raise the present value of the bonus.
Leverage ratio hypothesis is that the more the leverage ratio is high, the more a manager have the choice to raise the EBIT, and so, want to reduce the descriptive negotiations.
The political cost hypothesis is that large corporation have a accounting choice to reduce EBIT more than small corporation. in this case, the allocation of economic resources is partially decided as a political process. Therefore, the theory on accounting changes can facilitate the development in the face to governmental regulation.
The limitation of this study is not having the empirical. test to use determinants of accounting changes reviewed in this study.