TheRiskManagementoftheAccountingFirmsResearchBasedontheCOSORiskManagementFramework

International Conference on Education Technology and Social Science (ICETSS 2014)Analysis of accounting risk based on derivative financial instruments1,a Gao Lin1Qingdao Vocational and Technical College of Hotel Management, Qingdao, Shandong 266000,Chinaa*****************Keywords: Derivative financial instruments; accounting risk; statistics; regressionAbstract. By selecting the listed commercial banks as the sample and other related financial ratios which affect earnings and risks of commercial banks, its empirical analysis has been carried out using SPSS16.0. And then connect the index that investors are more concerned about in financial indicators with the main line- the proportion of derivative financial instruments. The use of derivative financial instruments could reduce bad loans of commercial banks through descriptive analysis and regression analysis of the results. Finally, the role of risk reversion and preserve or increase the value has been achieved.IntroductionWith the continuous development and modification of China's financial markets, the derivative financial instrument which is the financial innovation product has been getting closer and closer to us [1, 2, 3]. But due to the integration of the global economy, China's capital market closely linked to the world market. The fluctuation of some financial products such as interest rates, exchange rates, stocks, bonds could affect rise and fall of many companies, and even the stability of a country's economic order. The characteristics of derivative financial instrument such as leverage and price volatility determine the considerable risks of its own. Many investors tend to ignore the temptation of interest risk derivative transactions, and give companies huge economic losses. Various crises caused by derivative financial instruments make people begin to re-examine its role. If we would give full play to the positive role of derivative financial instruments, we should reduce its risk as much as possible. Accounting risk is one of the most critical risks. Therefore, how to reduce the risk plays an important role to maximize the positive function of derivative financial instruments. Therefore it is very necessary to explore the risks of derivative financial instruments accounting from this point.By selecting the listed commercial banks as the sample and other related financial ratios which affect earnings and risks of commercial banks, its empirical analysis has been carried out using SPSS16.0. And then connect the index that investors are more concerned about in financial indicators with the main line- the proportion of derivative financial instruments. After observing the test value of this model could go through the critical value standard, making the classification of different financial indicators, from final disclosure in the financial reports, you could see whether the derivative financial instruments could avoid the risk of commercial banks and improve the benefits. The connotation of the derivative financial instruments accounting riskDerivative financial instrument is a bilateral contract or payment exchange agreement based on the future. Its value is taken or derived from the price of the relevant subject matter and its changes, which include but are not limited to stocks, bonds, currencies, interest rates, exchange rates and index [6]. The connotation of derivative financial instruments could be generalized into:① the value of derivative financial instruments will vary and change with the name of the subject matter and terms of payment. ②an initial net investment or the required initial net investment has no request.③: Net amount is required or permitted in the future. Derivative financial instrument does not have value in itself, but its price is changed with the underlying instrument. There are a wide variety of derivative financial instruments with flexible design. In accordance with their needs, companies could producedifferent derivative financial instrument varieties. As the market-based subject matter is in a constant state of change, buyers and sellers in most cases do not completely insight into all the factors that lead to changes in the market. Leverage is also the largest characteristic of derivative financial instruments.Origin of derivative financial instruments is from avoiding risks. Avoiding risk is the most important function. Derivatives trading in particular floor trading has a large number of traders who will analyze and forecast price dynamics on the basis of collected information. They reach an agreement for sale by public auction to ensure the unity of the price in space and advance and coherence in time. The rentability of derivative transactions mainly includes the income from the operation and revenues from derivatives brokers.Derivative financial instruments accounting risk is the combination between the instruments and accounting risks. Therefore it has the characters of the instruments and accounting risks. That is to say, Derivative financial instruments accounting risk poses the characters of objectivity, severity, uncertainty and uncontrollable nature from accounting risk. At the same time it also has high risk, financial leverage, uncertainty and other features from derivative financial instruments.Empirical Analysis of derivative financial instruments based on riskSample Analysis: In this paper, 10 listed commercial banks in Shanghai and Shenzhen have been selected randomly. Put annual data from 2011 to 2013 as the object. And then finalize total of 30 samples in three years as the raw data for statistical models. Some commonly- used data indicators are used in this paper including earnings per share, the NPL ratio, loan provision ratio, ROE, capital adequacy ratio, etc. which could be obtained directly from basic financial data from the company in Securities Star and annual reports of listed commercial banks. But some financial data and ratios closely related to derivative financial instruments, for example, the value of the derivative financial instrument contracts, the weighted average rate of return risk assets, operating margin and others which need classification statistics and computing from the recent annual report 10 listed commercial banks. In this article, the collation of original data and calculation of ratios will use Excel2007. Descriptive statistics analysis and the test of regression model will be conducted by the use of the statistical software SPSS16.0.Selecting and removing of variables: Selecting the common financial ratios which could reflect listed commercial bank profitability as explanatory variables, financial ratios related to derivative financial instruments as explanatory variables. By the replacement of the four explanatory variables in the statistical model, SPSS16.0 has been performed to do statistical analysis. And then significant analysis has been conducted by outputting results to determine whether significant explanatory variables could affect the explained variables or not. Finally, operation analysis on the final conclusions has been conducted to draw the conclusions on the status of derivative financial instruments in our country, the influence as well as recommendations.Explanatory variables: X1: Derivatives / Total Assets (%); X2: ROE (%); X3: risk-weighted assets yield (%); X4: NPL ratio (%);Variable being explained variables: Y1: Operating margin (%); Y2: Capital Adequacy Ratio (%); Y3: loan provision ratio (%); Y4: earnings per share (RMB / share)Descriptive statistical analysis: From Table 1, we can see that the maximum value of X1 (contract value of derivative financial instruments / total assets) was 24.54, the minimum is 1.95, a standard deviation of 8.14333, which is easy to see that there is a great gap and volatility in the proportion of derivatives financial instruments holding by China's listed commercial banks. The skewness of X2 (ROE) indicates that the span is not great but its volatile is great. And there is great difference in ROE for different listed commercial banks. X3 (return on risk-weighted assets) distributes in right-skewed. It is not difficult to see from the indicators that its volatility rate of return is not great when the listed commercial banks make use of speculative risk assets. X4 indicates that there is no much difference in bad loan from listed commercial banks and the volatility is small. Y1 (operating margin) indicates that there is a great difference in terms of profitability and volatility is also very large. When the skewness is less than 0, the trend is left-skewed distribution. Y2 (capital adequacy ratio) indicates thatall listed commercial banks have already met the requirements and the volatility is very small. So the capital adequacy ratio is a more stable indicator. Volatility of Y3 (loan provision ratio) is not large. But the span of each listed commercial banks is relatively large. So there is a certain gap for the management of non-performing loans. Y4 (EPS) shows that the minimum is 0.32, the maximum is 2.66, a standard deviation is 0.60201and the skewness is 1.301. The overall volatility is not great and the overall trend is right-skewed, which indicate that the individual listed commercial banks profitability and stock investment value are relatively low.Table 1 Commercial Banks descriptive statisticsN Min Max Mean Std. Deviation SkewnessY1 30 28.09 57.03 48.3103 7.10198 1.248 0.427Y2 30 10.02 13.68 11.6610 0.94002 .227 0.427Y3 30 0.86 2.82 2.0020 0.51639 -0.449 0.427Y4 30 0.32 2.66 0.9597 0.60201 1.301 0.427X1 30 1.95 24.54 12.0113 8.14333 0 0.427X2 30 13.04 24.46 18.8513 2.80770 0.360 0.427X3 30 0.87 2.68 1.7664 0.42734 0.303 0.427X4 0.38 1.54 0.9127 0.34580 0.350 0.427 Analysis of regression: The first linear equation isY1 = β0 + β1X1 + β2X2 + β3 X3 + β4 X4 + ε.From Table 2, we first observe the goodness of fit R2 is 0.869, relatively close to 1. So we could say that the initial linear regression model is feasible. In this paper, when we test the significance, we adopt α is 0.05.firstly, we test F. Since the number of samples in the model n is 30, the explanatoryvariable number is 4, the distribution from F to F is (4, 25). From statistical data table, we could acquire that (4,25) equals to 2.06. And from the above table, it is shown that F equals to 41.483 which is less than 2.06 and P is 0 which is less than0.05. Therefore linear regression line is conformed to conditions and the regression equation is:Table 2 Result of Linear equation structureAfter removing the independent variable X2, the linear regression model has been proposed. The result is shown in Table 3. X1 (derivatives / Total assets) has played a positive relationship role for Y1 (operating margin), but its weight ratio is much smaller than X3 (return on risk-weighted assets). The more X4 (NPL ratio) is, operating profit margin of commercial banks is lower. The coefficient in the model is negative. Therefore, the equation has realistic meaning. So the proportion of derivative financial instruments in commercial banks' total assets has positive impact on operating profit ratio. But the impact may not be very large. Because each listed commercial banks have strict rules on the risk assets, it cannot have substantial impact on the listed commercial banks operating margin from the status of the current use of derivative financial instruments.Table 3 Result of the regression equation of Y1 Table 4 Result of the regression equation of Y2From Table 4, for linear regression of Y2 is a failure, because the data obtained from X1 t=0.227 which is less than critical value = t0.025 (25) = 2.06. The entire linear regression equation isn’t very significant. So it does not have statistical significance. From the results, I can safely infer that Y2(capital adequacy ratio) is mandatory. Every listed commercial bank should reach the standard. Therefore, no matter how much X1 (derivative financial instruments / total assets) is, it could not affect the financial law. The regression model to X1 (derivatives / Total assets) is pointless.Table 4 Result of the regression equation of Y3 Table 5 Result of the regression equation of Y4As can be seen from Table 4, only the absolute values of t from X1 and X3 are respectively 4.627 and 2.544 which are less than 2.052. At the same time, the values P of X1 and X3 are respectively0.000 and 0.017 which are less than 0.05. Therefore removing a variable in last step is effective. X1 (derivatives / Total assets) plays a reverse effect on Y3 (loan provision ratio), namely the larger of proportion of derivative financial instruments holding by listed commercial banks is, the smaller Y3 (loan provision ratio) is. at the same time, provision for diminution in value will reduce. So the model supports the reality of the theoretical results. Second, X3 (risk-weighted assets yield) produces positive effect on Y3 (loan provision ratio). The higher net profit from risky assets, the proportion of provision for diminution in value in the loans will be greater. It is indicated that the scale of the loan is reduced. Because investment in other risky assets can get more revenue and the loan provision ratio is also reduced, the independent variable also has realistic significance.From Table 5, the linear regression of Y4 is a failure, because the data X1(t) is 0.124 which is less than the critical value (t0.025 (25) = 2.06). This is not very significant in the linear regression equation. Therefore it has no practical statistical significance. We could not conclude that Y4 has no linear relationship with the other four independent variables. Because coefficientβ1is 0, the initialregression equation has no significance. From the result of the regression model, I can safely infer that Y4 (EPS) is determined by after-tax profits of listed commercial banks and ordinary shares. And the derivative financial instruments can affect the molecular weight, but it hasn’t too direct impact on shares of the listed commercial banks. Therefore, whether listed commercial banks to hold how much X1 (derivatives / total assets), there is little effect.Accounting income, risk and disclosureThe scale of derivative financial instruments has played a positive role in operating margin and brings returns for commercial banks. From the regression results by earnings, although the effects of instrument on earnings are subtle, there is the rising trend of its scale.From loan provision ratio, we can see that derivative financial instruments have inhibiting effect on the decrease in loans of commercial banks. That is to say, the use of derivative financial instruments could reduce bad loans of commercial banks to realize risk reversion and preserve or increase the value. The development of derivative financial instruments has real economic significance. To some extent, the use of derivative financial instruments could reduce economic turmoil and provide some protections for the world economy stable operation.Establish a good model of quantitative analysis. Changes in derivative financial instruments are the key factor in its complex and difficult to control. Therefore the establishment of a quantitative analysis model by the use of computer technology is a better solution to track changes in derivative financial instruments. To improve the company's internal risk control department, reduce operational risks, we should carry out authorized approval and control strictly for the derivative financial instruments. And eliminate the use of some characteristics such as change and difficult to measure to do any illegal operations to ensure that real-time monitoring of their internal risk control department, and constraint the operator behavior. The incompatible positions should separate with each other. For the staff in internal risk control departments, some prevention measures such as regular rotation should be implemented.ConclusionsBecause of the economic operation situation in the real market and investor’s transaction demand, the rules of derivative financial instruments could be able to improve continuously. so the external economic environment could have influence on derivative financial instruments which could serve the market. By selecting the listed commercial banks as the sample and other related financial ratios which affect earnings and risks of commercial banks, its empirical analysis has been carried out using SPSS16.0. And then connect the index that investors are more concerned about in financial indicators with the main line- the proportion of derivative financial instruments. The use of derivative financial instruments could reduce bad loans of commercial banks through descriptive analysis and regression analysis of the results. Finally, the role of risk reversion and preserve or increase the value has been achieved. After observing the test value of this model could go through the critical value standard, making the classification of different financial indicators, from final disclosure in the financial reports, you could see whether the derivative financial instruments could avoid the risk of commercial banks and improve the benefits.References[1] Zhang Xiuyun. Research on Financial derivatives risk of accounting regulation [D].Hei Longjiang：Northeast Forestry University,2010.[2] Liu Jing. Review of Chinese derivative financial instruments [J]..Journal of Shanghai Lixin accounting college,2005,（05）：25-28.[3] Wang Qibo. The characteristics of the derivative financial instruments accounting standards development[J]. Journal of Shanxi university of finance and economics,2006,28(01)：125-127. [4] Shan Rong. The disclosure of financial derivatives risk information：Based on the research analysis of the subprime crisis [J].China Business,2010,(01)：43-44.[5] Guan Sujuan. The identification and control of Enterprise accounting risk [J]. China's collective economy,2010,（08）：149-151..[6] Wu Lingling. The disclosure research on Derivative financial instrument risk [J]. Management & Technology of SME,2009,（08）：76-76.[7] Li Changyan. A brief analysis of derivative financial instruments accounting treatment [J]. Friends of Accounting,2009,（03）：64-66.[8] Zhang Tingting. The studies on derivative financial instruments accounting [D].Beijing：Capital University of Economics and Business,2010.[9] Zhang Qingyi. The research on Accounting problems of derivative financial instrument risk[D].Liao Ning：Northeast University of finance,2007.。

Management Accounting Research1. IntroductionA number of innovative management accounting techniques have been developed over the past two decades, the most widely known of which are Activity-Based Costingand the Balanced Scorecard (BSC). Prior literature evaluates the success of these techniques by estimating its adoption rates and testing relationships between use and different types of outcome measures. Outcome measures used are, amongst others, use of the system, impact on decisions made based on information from these systems, dollar improvements following implementation of the system,and management evaluation of system success (Foster and Swenson, 1997). This study not only assesses the level of use, but also focuses on the purposes forwhich managersuse the BSC.Many factors influence individual BSC usage. First, usage is influenced by theway the organization intends to use the BSC, and therefore by the design of the scorecard. Second, individual usage is influenced by the opinions of top management, supervisors, and other colleagues of BSC users,and by other elements of the control system available in the firm. Together, these factors lead to a varying degree of pressure on individual BSC users to use the scorecard, i.e. the subjective norm. As Hartwick and Barki (1994) argued ，however, when system usage is mandatory, i.e. the subjective norm to use the system is strong, the intensiveness of use might still vary. Somemanagers will use the system all the time, whereas others will use it selectively, e.g. when they consider using it to be effective. This implies that even if BSC usage were mandatory in a firm, both the intensiveness and purposes of use might vary among managers. In this paper, I explore this individual BSC usage in the context of organizational usage (firm effects).I address anumber of avenues for further research raised by Malmi (2001). First, he suggests that future research should study whether we can explain various types of BSC usage by looking atfirmcharacteristics. Second, he suggests that we know little about the impact of using the BSC on other control mechanisms in the firm. I provide additional insights into these questions for BSC usage at the individualmanager level.First, I explore the purposes for which managers use the BSC. For this analysis, I adopt an instrument developed by Doll and Torkzadeh (1998) which measures the multidimensional usage of amanagement information system(MIS). The instrument mainly captures BSC usage for decision-making and is less well developed for measuring usage for control purposes and strategy communication.1Provided that individual usage is examined in this study, and that thecommunication of strategy and control of employees are primarily firm purposes, these limits do not seem to be too severe. Second, I explore the drivers of these different purposes of BSC usage. These drivers are the evaluation style ofmanagers, other controlmechanisms used in the organizational units, and the receptiveness of managers to information from modern performance measurement systems. Use of performance measurement systems is influenced by how managers evaluate their subordinates (Otley and Fakiolas, 2000). The BSC consists of a number of different types of measures that make a distinction between financial and non-financial measures, objective versus subjective measures, leading indicators versus lagging indicators, and measures that are easilyquantifiable as opposed tomeasures that aremore difficult to quantify. Managers can therefore evaluate performance on many different dimensions. The way managers evaluate their subordinates’ performance is therefore expected to influence the intensiveness of BSC usage and type of BSC usage. Based on an exploratory factor analysis, I identify three different dimensions of evaluation style. These dimensions include whether managers have a rigid or a flexible evaluation style to evaluate their subordinates; whether they value financial or non-financial performance measures more strongly; and whether they value quantitativeor qualitative performance measures more strongly. Further, usage of the BSC takes place amid the usage of other control mechanisms, because firms often use a package of controls (Otley, 1999). The design of this control package is also expected to influence intensiveness and type of BSC usage. Finally, the adoption diffusion literature suggests that some individuals are more innovative and more eagerto experiment with new systems than others (Rogers and Shoemaker, 1971). Therefore, greater receptiveness on the part ofmanagers to use newtypes of information sources is expected to result in higher BSC usage. The different dimensions of BSC usage and evaluation style are both identified from an exploratory factor analysis. Therefore, the nature of this study is exploratory.The survey was conducted in 19 firms identified as BSC users. The sample consists of 224 managers responsible for the BSC of a department or business unit in these firms. From an exploratory factor analysis, I find three different purposes of BSC usage: (1) a decision-making and decision-rationalizing dimension; (2) a coordination dimension; and (3) a self-monitoring dimension. The three resulting dimensions have a moderately high correlation with each other, suggesting that these purposes of use are complementary. BSC usage for decision-making and decision-rationalizing is positively related to the number of action controls used and manager’s receptiveness to new types of information. BSC usage for coordination purposes is also positively related with manager’s receptiv eness to new types of information and positively relatedwith the emphasis placed on managerial evaluations of subordinates. Finally, BSC usage forself-monitoring is positivelyrelated with the emphasis placed on managerial evaluations.4. Results4.1. Different purposes of BSC usage Doll and Torkzadeh’s original instrument consisted of 30 items. Before the surveywas administered, a pilot study with fivemanagers assessed the usability of the instrument to measure BSC usage. Eight items were deleted after this pilot study, mainly because of item overlap, or because the items did not fit in the BSC framework. For example, item V6 from the original instrument is almost the same as item V5. The original and the used instrument are presented in Appendix A. I use exploratory factor analysis to identify the purposes of BSC usage. Although the instrument seems appropriate for measuring BSC usage, this is the first time this instrument has been used to evaluate a management accounting system. Therefore, it is unclear whether the same theoretical dimensions should be extracted from the analysis compared with Doll and Torkzadeh’s (1998) results. I employ confirmatory factor analysis to compare the resulting factor solution from this study with the original outcome in Doll and Torkzadeh (1998). The chi-square difference test and the Akaike information criterion suggest that the factor solution in this paper better fits the data than the original Doll and Torkzadeh model.4.2. Evaluation style, control alternatives, and receptiveness to new informationIn this section, I discuss the measurement instruments used for the independent variables. First, factor analysis explores the number of dimensions in the set of items that captures evaluation style. Afterwards, the instruments used tomeasure control alternatives and receptiveness are explained.Exploratory factor analysis of the set of items that capture evaluation style reveals three dimensions.These dimensions are labeled (1) appropriateness of using financial versusnon-financial measures; (2) appropriateness of using qualitative versus quantitative measures; and (3) rigidity or flexibility of the evaluation. Table 3 reports the items for each dimension, its explained variance and CronbachThe appropriateness of non-financial versus financial measures use (NFF) dimension includes two questions that refer to the adequacy of non-financial versus financial measures for the functioning of the manager and to evaluate his organizational unit performance. The one factor solution explains 79% of the variance in the two items. Cronbach of the factor is 0.72.5. Discussion of the resultsThe results fromtheempirical analysis suggest that firm effects, organizational unit effects and individual manager effects influence BSC usage. First, the regression results indicate that some firms have a higher average score than other firms. Together with the lower standard deviations of the two firms that have the highest average BSC usage, this indicates that these firms probably stimulate the use of the system, for example, they make BSC use mandatory or introduce managers to its beneficial effects. Although the study suggests that firm effects play a role, it does not provide an understanding of which firm characteristics these are. The literature provides a number of suggestions. First, Ittner et al. (2003) showed that users and non-users of the scorecard did not differ in the type of strategy (i.e. either a maintain, innovate or flexible strategy) they implemented, which seems to be con sistent with Kaplan and Norton’s argument that all firms, irrespective of their strategy, need a BSC. Second, the firm structure, for example, degree of decentralization and interdependency,might influence the extensiveness and purposes of BSC usage. For example, Abernethy and Bouwens (2005) argue that decentralization might mitigate the resistance of managers to using new accounting information systems, such as the BSC. The reasons provided for this conjecture are that decentralization increases the ability of managers to adapt the organizational unit to these new information systems, and second that decentralization leads to higher involvement of the unit manager in the design of accounting systems and therefore leads to more meaningful information. Third, the design of the BSC and subsequently the quality of the scorecard might influence its usage. For example, a number of studies suggest that not all firms that implemented a BSC also used cause and effect logic (Bedford et al., 2006; Speckbacher et al., 2003; Ittner et al., 2003), and this might have an impact on the intensiveness and type of usage. Finally, the organizational adoption literature suggests that factors, such as the existence of a project “champion”, the size of the firm, and the usage of consultants all influence the decision to adopt a BSC or not. Further research is needed to explore whether these factors also influence the intensiveness and type of use.管理会计研究1介绍许多创新的管理会计技术已经开发在过去的二十年里,最广为人知的是基于活动的成本核算和平衡计分卡(BSC)。

1. Introduction, Course Overview and the Examples for PresentationBall R., and P. Brown. 1968. An Empirical Evaluation of Accounting Income Numbers. Journal of Accounting Research 6: 159-178.Beaver W.H., 1968. The Information Content of Annual Earnings Announcements. Journal of Accounting Research 6: 67-92.2. The Information Content of Accounting Earnings: ERCEaston, P., and M. Zmijewski. 1989. Cross-Sectional Variation in the Stock Market Response to Accounting Earnings Announcements. Journal of Accounting and Economics 11: 117-141.Collins, D.W., and S.P. Kothari. 1989. An Analysis of Intertemporal Cross-Sectional Determinants of Earnings Response Coefficients. Journal of Accounting and Economics 11: 143-181.Lipe, C., 1986. The Information Contained in the Components of Earnings. Journal of Accounting Research 24: 37-64.3. Other Accounting Information and Stock PricesBowen, R.M., D. Burgstahler, and L. A. Daley. 1986. Evidence on the Relationships between Earnings and Various Measures of Cash Flow. The Accounting Review 61: 713-725.Jegadeesh N., and J. Livnat. 2006. Revenue Surprises and Stock Returns. Journal of Accounting and Economics 41: 147-171.Kothari S.P., and R. G. Sloan. 1992. Information in Price about Future Earnings: Implications for Earnings Response Coefficients. Journal of Accounting and Economics 15: 143-171.4. Time-Series Properties of Accounting InformationFoster, G., 1977. Quarterly Accounting Data: Time-Series Properties and Predictive-Ability Results. The Accounting Review 52: 1-21.Brooks, L., and D. Buckmaster. 1976. Further Evidence of the Time Series Properties of Accounting Income. The Journal of Finance 31: 1359-1373.Freeman, R., J. Ohlson, and S. Penman. 1982. Book Rate-of-Return and Prediction of Earnings Changes: An Empirical Investigation. Journal of Accounting Research 20: 639-653.5. Analyst ForecastsO’ Brien, P., 1988. Analysts’ Forecasts as Earnings Expectations. Journal of Accounting and Economics 10: 538-.Dechow, P., A. Hutton, and R. Sloan. 2000. The Relation between Analysts’Long-TermEarnings Forecasts and Stock Price Performance Following Equity Offering. Contemporary Accounting Research 17: 1-32.Irvine, P.J. 2004. Analysts’ Forecasts and Brokerage-Firm Trading. The Accounting Review 79: 125-149.6. Earning Management: Part IBurgstahler, D., and I.D.Dichev. 1997. Earnings Management to Avoid Earnings Decreases and Losses. Journal of Accounting and Economics 24: 99-126.Matsumoto, D. 2002. Management’s Incentives to Avoid Negative Earning Surprises. The Accounting Review 77: 483-514.Jones, J. 1991. Earnings Management during Import Relief Investigations. Journal of Accounting Research 29: 193-228.7. Earning Management: Part IIDeFond, M.L., and J. Jiambalvo. 1994. Debt Covenant Violation and Manipulation of Accruals. Journal of Accounting and Economics 17: 145-176.Gramlich, J.D., M.L. McAnally, and J. Thomas. 2001. Balance Sheet Management: The Case of Short-Term Obligations Reclassified ad Long-Term Debt. Journal of Accounting Research 39: 283-295.Daniel, N.D., D.J. Denis, and L. Naveen. 2008. Do Firms Manage Earnings to Meet Dividend Thresholds? Journal of Accounting and Economics 45: 2-26.8. Management Disclosures and Disclosure QualityBotosan, C., 1997. Disclosure Level and the Cost of Equity Capital. The Accounting Review 72: 323-349.Skinner, D. 1994. Why Do Firms V oluntarily Disclose Bad News? Journal of Accounting Research 32: 38-60.Lang M.H., and R.J. Lundholm. 1996. Corporate Disclosure Policy and Analyst Behavior. The Accounting Review 71: 467-492.9. Financial Accounting: an International View（3学时）Ball, R., S.P. Kothari, and A. Robin. 2000. The Effect of International Institutional Factors on Properties of Accounting Earnings. Journal of Accounting and Economics 29: 1-51.Morck, R., B. Yeung, and W. Yu. 2000. The information Content of Stock Markets: Why DoEmerging Markets Have Synchronous Stock Price Movements? Journal of Financial Economics 58: 215-260.Lang, M., J.S. Ready, and M.H. Yetman. 2003. How Representative Are Firms that Are Cross-Listed in the United States? An Analysis of Accounting Quality. Journal of Accounting Research 41: 363-386.参考书目[加]威廉姆·司可脱著，陈汉文译，《财务会计理论》，机械工业出版社。

管理会计参考文献英文References for Management Accounting.1. Brimson, J. A., & Antos, D. L. (2015). Managementand cost accounting (14th ed.). McGraw-Hill Education.This textbook provides a comprehensive overview of management accounting principles and practices. It covers a wide range of topics, including cost behavior, cost-volume-profit analysis, budgeting, and performance evaluation. The authors present a clear and concise explanation of these concepts, making it an ideal reference for students and practitioners alike.2. Horngren, C. T., Datar, S. M., & Rajan, M. V. (2015). Cost accounting: A managerial emphasis (16th ed.). Pearson Education.This book is another excellent resource for understanding the fundamentals of management accounting. Itfocuses on the application of cost accounting techniques in decision-making, planning, and control. The authors present real-world examples and cases to illustrate the practical relevance of these concepts.3. Kaplan, R. S., & Norton, D. P. (2017). The balanced scorecard: Translating strategy into action (4th ed.). Harvard Business Review Press.This book introduces the balanced scorecard framework, which is a strategic planning and management system that helps organizations align their activities with their strategic goals. It provides a comprehensive guide to implementing the balanced scorecard approach, including step-by-step instructions and real-world examples.4. Johnson, H. T., & Kaplan, R. S. (2017). Relevance lost: The rise and fall of management accounting. Harvard Business Review Press.This book critically examines the current state of management accounting and its relevance in today's businessenvironment. The authors argue that traditional management accounting practices are outdated and no longer sufficient to support strategic decision-making. They propose a new approach to management accounting that is more focused on providing relevant and actionable information to decision-makers.5. Drury, C. (2018). Management and cost accounting (11th ed.). Cengage Learning.This textbook is designed to introduce students to the principles and practices of management accounting. It covers a range of topics, including cost classification, budgeting, standard costing, and performance evaluation. The author presents a clear and accessible writing style that makes the material easy to understand.6. Atkinson, A. A., Banker, R. D., Potter, G., & Srivastava, A. (2018). Management accounting (16th ed.). Prentice Hall.This book offers a comprehensive overview of managementaccounting theory and practice. It covers a wide range of topics, including cost behavior, cost-volume-profit analysis, budgeting, performance evaluation, and decision-making. The authors provide a balance of theoretical concepts and practical applications, making it a useful resource for both students and practitioners.7. Horvath, M. A. (2019). Cost management: A strategic emphasis (6th ed.). Pearson Education.This textbook focuses on the strategic aspects of cost management in organizations. It explores the role of cost management in supporting strategic decision-making, planning, and control. The author presents a range of cost management techniques and tools, including activity-based costing, target costing, and life cycle costing.8. Brownell, P. (2020). Strategic management accounting: An integrated approach. McGraw-Hill Education.This book takes a strategic approach to management accounting, emphasizing its role in supportingorganizational strategy and competitive advantage. It covers a range of topics, including strategic costing, budgeting, performance evaluation, and decision-making. The author provides a comprehensive framework for integrating management accounting into the strategic planning and management process.These references provide a diverse range of perspectives on management accounting, covering both theoretical concepts and practical applications. They are suitable for use in academic settings as well as for professionals seeking to enhance their knowledge and skills in this field.。

The Evaluation and Analysis of the Accounting SupervisionMode Based on the Accounting Management SystemAbstract: The accounting supervision mode of a country is determined by, and in turn, acts on the ccounting management system and reflects the accountingmanagement system. As far as our country is oncerned, the accounting management system is forced by the government, which determines that the current ccountant supervision mode is the government-enforced. This paper starts from the relationship between the ccounting management system and theaccounting supervision mode, and focuses on analyzing the problems in he current accounting supervision mode of our country in an effort to construct a rational accounting supervision mode,improve the efficiency of accounting information market, and guarantee accounting information quality.Key words: accounting management system accounting supervision mode government-enforcedmodeIt is widely recognizedthat as a kindof important social resources, accounting information plays important roles in promoting the rational distribution of social resource, strengthening enterprises’ management and administration and serving for country’ s macro controls. However, the roles depend on theaccounting information quality. In the current society, according to international and domestic situations, the accounting information quality is worrying. Many people blame it on accountants and certified public accountant (CPA), leading to the so- called “ accountant’ s credibility crisis” . The author thinks accounting credibility is no doubt one of the important factors that thequality of accounting information builds on, but a rational accounting supervision mode is the main factor that guarantees the quality of the accounting information. For this reason, this paper will start from explaining the relationship between the accounting management system and the accounting supervision mode and focus on analyzing the problems in the current accounting supervision mode of our country in an effort to construct a rational accounting supervisionmode,improve the efficiency of accounting information market,and guarantee accounting information quality.The accounting management system is an organizational system by which a country or region defines its organizational forms of the management through accounting, divides the duty andauthority of the managementthrough accounting,sets up the organizations and defines accounting personnel’s identities. Th e accounting management system is determined by the social environment, especially the economic system. All over the world, the accounting managementsystem can be divided into three kinds: (1) The association-oriented management system whose characteristic is: The non-governmental accounting organizations are in charge of the accountingaffairs of the whole country, including setting up accounting rules, organizing the academic research, implementing the accounting supervision, etc., as the administrative staff of the economic organization accounting personnel are only responsible for the administration leader of their organization; (2) Government-oriented management system whose characteristic is: The government takes charge of country accounting affairs, while the non-governmental accounting organizations put forward the suggestions on the government’ s accounting policy; the accounting goal is to safeguard government’ s interests and guarantee the state revenues; and accounting personnel are only responsible for their organization; (3) Government-enforced management system, whose characteristic is: The government takes charge of country accounting affairs, making a uniform accounting system,emphasizing the accounting personnel’s responsibilities for the country; the accountingsupervision relies mainly on the country; the academicresearch is restricted by government to a great extent.Accounting supervision refers to the re-supervision and re-management, by the principal part of the accounting supervision, the process and result of accounting activities performed by supervised organizations.Substantively,it is akind of management activities. According to the different principal parts, accounting supervision can be divided into three kinds of supervision: the government supervision, the industry self-disciplined supervision and enterprise supervision.These three kinds of accounting supervision modes complement and interact with each other, forming the accounting supervision mode of a country.According to the different operating mechanisms of supervision, three kinds of concrete modes are included: (1) The industry self-disciplined supervision modewhose characteristic is: The association of CPA supervises its business and the government just punishes the activities against law and discipline;On one hand enterprises are supervised by the association of CPA, on the other hand supervision involvescompany’ s administration structure; (2) The government-oriented supervision mode whose characteristic is: emphasizing the government’ s dominant role in the accounting supervision modes with the purpose of revising the deficiency of the market mechanism; the industry supervision is conducted by the association; enterprises supervise involves company’ s administration structure; (3) The government-enforced supervision mode whose characteristic is:emphasizing the uniqueness of government accounting supervision, while the industry supervision and enterprises supervision are the extension or continuation of a governmental supervision.The accounting supervision mode is an important component of the accounting management system. The country accounting management system determines the accounting supervision mode. In a country with the association-oriented accounting management system, the industry self-disciplined supervision mode is adopted; in a country with the government-oriented accounting management system, the mode of government-oriented supervision is adopted; in a country with the government-enforced accounting management system, the mode of government-enforced supervision is adopted. The accounting supervision modeof a country acts on the accounting management system and reflects the accounting management system. The accounting management system is determined by the social environment, especially economic environment, so when the social environment of one country,especially economic environment changes, it will lead to the change in its accounting supervision mode, and eventhe further reform in the accounting management system.The industry self-disciplined supervision mode means that the association of CPA sets up a set of self-disciplined supervision mechanism to supervise the CPAs independence and auditing quality. The advantagebeing able to prevent the government department frombusiness, increasing the control cost of the whole society,of this mode lies inover-supervising theand malfunction.Itsshortcominglies in: It is apt tocause indulgence in market accountingsupervision,thus to cause market failure. This kind of mode indicates that in such an extremely complicated current market economy the supervision turns out to be useless only relying on one of the principal parts of accounting supervision, and to be failure in the optimum disposition of resources.Based on the effective contract arrangement between the government and the market and focusing on market accounting supervision, the government- oriented accounting supervision emphasizes the government’ s leading role in supervising market, The advantages of this kind of mode lie in being able to operate based on the market mechanism, give play to the role ofmarket mechanism in distribution resources, and prevent the market-failure. Its shortcomings lie in the difficulty of defining the range of government accounting supervision and that of market accounting supervision, and the probability to cause the government’ s or the market’ s failure.In government-enforced accounting supervision, supervision is mainly conducted by the government and market supervision exists in the form of the association of CPA, but the association is a department or the one attached toa department in the government rather than an actual market supervisor. Its advantage lies in the status independence of the supervisee, with legal authorityand the force to punish the illegal supervisees in accordance with the law. Its shortcoming lies in over- emphasizing the government’ s function, and consequently being unfavorable to giving play to the role of market mechanism, eventually resulting in the government-failure.As regards our country, the accounting management system belongs to government-enforced type, which has decided the current accounting supervision mode, that is, the mode of government-enforced supervision. However, some problems exist in the mode as follows:Which departments should be responsible for carrying out the accounting supervision? The departments such as finance, auditing, tax, People’s Bank o f China, the industry and commerce (including government’ s authorized organizations) and the organizations such as the government’ s accredited boards of supervisors to the state-owned enterprises and the financial institutions, etc. are legally entitled to fulfill their duties of supervision through the accounting information of the organization concerned. It is obvious that the essence of government accounting supervision is the multi-supervision. However, two problems exist in the mode of multi-supervision. First, the duties of every department (organization) overlap and therefore are dissimilated so that theprimary departments of supervision and the secondary ones are mixed and as a result, it is hard for the concerned departments to coordinate smoothly. Eventually the supervision will become ineffective. Second, the efficiency of the government’ s supervision becomes low so that lawbreakers bear the idea of leaving things to chance andinevitably the unlawful practice in the accounting field is encouraged.Two questions should be discussed: What does the governmental accounting supervision mainly involve? And what organizations should be supervised? In the countries with the ripe market economy, it is widely acceptedthat the main target supervised is the result of activities performed by the supervised objects, namely, supervising the quality of the accounting information in the form of financial accounting reports. On the other hand, in terms of the supervised organization, it falls into two categories: One is the organization having important influence on the public’ s interests, and the other is the state-owned organization. Toother organizations, supervision is mainly implemented by making accounting standards and relevant legal systems soasto urge these organizations to offer true, entire accounting information in accordance with the law. In our country, the government’ s accounting supervision is mainly the process of the accounting activity of the supervision object, with the focus on the accounting materials, the methods to deal with accounting materials, and accounting personnel who are responsible forproducing and providing accounting information, because they are all importantfactors in influencing accounting information quality. Standardizing and controlling the process in which the accounting information is produced help to improve accounting information quality. But considering the economic business is becoming more complicated, the cart will be put before the horse the supervision efficiency and effectiveness will be weakened if only focusing on supervising the process of the accounting activity, neglecting the supervision ofthe result of the accountingactivity. According to the “ Accounting Law”and the systems concerned, all the accounting information in all the organizations in our country is supervised by the government. Those organizations include government organs, social organizations, companies, enterprises,public institutions andother organizations. The wide supervisedrangemakes the government unable to do what it wishes,and the effective accounting supervision difficult. Even if the government manages to do it, the cost will be too high, and when accounting information is distorted, the government will be charged with its deficiency in supervision.An important reason why the government fails to do its best in supervisionand puts unlawful practice right is that the responsibility system is imperfect, including the quality of accounting information and failure to set up and implement the responsibility system in quality supervision. For example, there is no regulation on the responsibility of the supervisors if a serious problemarises after the approval and publication of enterprise’ s financial report by the supervision department or organization. 5. Conclusion: The Realistic Choice of the Accounting Supervision Mode in Our Country Considering the above-mentioned problems, I think accounting supervision should be strengthened in the following aspects in our country.For historical reasons and because of accounting personnel quality and professional ethics, etc., our accounting management system is still government-enforced type in the future, which determines the existence of the government-enforced accounting supervision mode. Under this kind of mode, the primary problem badly in need of solution is to define the principal part of accounting supervision, solve the problems of multi-supervision at present, andthen improve the government’s efficiency of supervision. It shou ld be made clear first whether the accountingmanagement organization in the financial department or the department of auditing, the association of CPA, or the stock or bank supervisory committee is the principal part of accountingsupervision. Such departments as industry and commerce, tax, People’ s Bank of China consult relevant accounting information while they fulfill work duty; so strictly speaking,they are unsuitable to become the principal part of accounting supervision.Learning from the experience of the ripe market economy of other countries,our main target of accounting supervision should be shifted from the process of accounting activities to the result of those activities, namely, supervising the quality of the accounting information in the form of financial accounting report. Government’s focus on supervising the result of the accounting activity can improve the supervision efficiency. The process of the accounting activity can be controlled according to relevant regulations and systems by the accounting personnel of the supervision object. In terms of the supervised organization,the government should focus onsupervising those organizations having important influence on the public’s interests and the state-owned enterprises. As for other organizations, the government should make accounting standards and relevant legal systems, leading these organizations to offer true and entire accounting information in accordance with the law.The supervision responsibility should be implemented from two aspects. First, intensify the punishment if any problem arises concerning the accounting information quality of the supervised object in order to guarantee the reliability of accounting information. This aspect can be implemented by detailing such relevant laws and regulations as “ Accounting Law” and “Criminal L aw”; Second, set up the responsibility system for supervision, if aserious problem arises after the approval and publication of enterprise’ s financial report by the supervision department or organization, the supervisiondepartment or the personnel involved should be responsible for the fault andbe punishedtosome degree.Our country is in the course of economic transition atpresent, we must realize the economic development, andthe organizational forms of enterprises and the government’ s function have a great impact on the accountingmanagement system. The accounting supervision mode should be rooted in the realistic social environment and match the accounting management system, so the mode fit for our country should be set up and perfected in the course of development. Blindimitation often gets half the return with twice the effort, just asTeri Aoki pointedout: “ It is nonsensical to make comments on the advantage ofthe management mode of a company and its suitability for transition economy without reference to the phase of a country’s development andthe history of itssystem and customs” . This applies to the accounting supervision mode, too. The optimummode is not absolute. The accountingsupervision mode is subject totheinfluence of the accounting management system and social economic environment, and results from the interaction of each part with different interests in different economic environments.References:1. Y ulin Yu, Duansheng Li. Research on the Basic Theory of Accounting (in Chinese), Economy & Management Press, 2001.052. Xinhe Li. AccountingIs the Other Person in the Modern Enterprise’s Agen tRelation (in Chinese), Finance and Accountancy, 1999(10)3. Association of Anhui Accounting. Investigations about the Accounting Information Quality Problem ——Analysis in Terms ofAccounting and Property Right (in Chinese), Accounting Research, 1999(4)4. Donghua Chen. The Accountant’ s System Innovation of Cyber Times: The Property Right Is Defined with Marketization (in Chinese), Accounting Research, 2000(2)5. Hang L iang, Xingguo Zhang. Accounting Internationalization (in Chinese), Finance and Accountancy, 2001(7)(Edited by Lisa, Ann and Joy)。

Northern Rock Bank Run and Risk of managementThe purpose of the essay mainly introduces the detailed analysis of case study in Northern Rock bank run. Analysis mainly focused on what about the process of risk, how the risks of Northern Rock bank run were identifies. For instance, the gap of asset-liability ratio in Northern Rock is oversize, Northern Rock has become the dependent role on the wholesale money markets for the majority of its financing and the original financing resource of Northern Rock was suffocated were all the process that created the bank run of Northern Rock.Besides, the ways of how deal and manage risks, for example, government and the central bank intervened adjustment, Northern Rock announced for the public through media and Internet, and the most important thing was that Northern Rock actively and timely sunk liquidity problem. Then, what did managers, government and financial authorities learn from the bank run risk? Also, suggestion will be support for regulatory authority, firms’management and shareholder at the last of the essay. Among that, the identification of risk and the process of risk happing was detailed statement by researching the backgrounds of Northern Rock. Finally, there were some recommendations would be supported for regulate authorities and people who care about risks in financial market such as Northern Rock self, deposits and other investors.Literature review:The essay contributes to extensive literatures on the analysis of banks run that affected in financial crisis. Studies particularly aimed on the bank run of Northern Rock. According to research, the process of identified Northern Rock bank run could be summarized as the gap of asset-liability ratio in Northern Rock is oversize, while the dependent role on the wholesale money markets for the majority of its financing (Thal Larsen, 2007) and the original financing resource of Northern Rock wassuffocated (Nesvetailova and Palan, 2013). Except address methods, recommendation ShouldMain body:Financial market has become more and more complex by the rapid pace of economic market development while risks exist in each financial investor, financial institution and financial industry all over the world, especially from the 2007 financial crisis (Shin, 2009). There a classic example that seriously affected by the crisis from year 2007 to 02011, it was Northern Rock bank run when came up in September 2007 and British Chancellor of the Exchequer announced that the crisis of the British Northern Rock was solved by temporarily nationalized until to February 2011. Northern Rock bank run was the British first bank run since 1866, there were about ￡3 billion of deposits were withdraw from Northern Rock in several days, it took 11% of Northern Rock total retail deposits which made an acute stress in both financial market and Northern Rock.Northern Rock as the fifth largest mortgage lenders and a member of British building societies form 1980s to 1990s (Official Journal of the European Union, 2008). Its main business is relying on the inter-bank lending and mortgage securities financing by issuing mortgage and also absorb depositors’ deposits at the same time (Cook et al. 2002). In the past, Northern Rock mainly through the interbank lending in the capital market, issuing notes and bond refinancing to raise fund for mortgage loans, which acquire differential interest profit. Northern Rock Annual Report (1998 2006) reported that the asset of Northern Rock grew from $18 billion to $101 billion and the market leader in British mortgage lending with 19% share of mortgage market from 1998 to year 2006 (Northern Rock Annul Report 2007.) it mainly depended on the ways of the interbank lending in the capital market, issuing notes and bonds refinancing to raise money for mortgage loans, which get the difference interest. Therefore, the model of Northern Rock’s financing has become a potential problem as a wrong funding match accruing. In other word, Northern Rock used a short-term financing to mortgage long-term financing, which exposed Northern Rock sunk into arisk that a substantial funding short would result in unexpected difficulties in future’s wholesale money markets.In the summer of 2007, a well-documented sub-prime began, the event resulted in the liquidity short in the wholesale money markets which upon Northern Rock (Linsley and Linsley, 2010). In the August of 2007, the Bank of England altered Northern Rock that the potential impact of the global crisis on Northern Rock would become unable to fill its funding gaps by the wholesale markets (Milne and Wood 2009).By the step, there were over 3 billion pounds liquid from Northern Rock, it took 12% of Northern Rock’s total amount of deposits just in several days, and the price of Northern Rock’s stock fell by 70% which became the biggest sufferer in the crisis in the UK.Refer to the process of Northern Rock bank run which can be summarized as three points that identified the bank run. First one is the gap of asset-liability ratio in Northern Rock is oversize, the wholesale market and housing loan market has its own pricing mechanisms, both issuing bonds and the asset securitization of housing loan were pricing depended on the market Libor during 3 months. However, the housing mortgage loan of Northern Rock was issued based on the benchmark interest rate of the Bank of England. It indicated that the interest rate of currency market was higher than the official interest rate, which made a big loss for banks. According to the 2007 annual report of Northern Rock shown that there over 96 billion pounds was mortgaged to consumers which has 12 billion pounds directly exposed under the gap of interest rate, it means if LIBOR is point higher 1,so Northern Rock should pay extra 1.2 million pounds.Importantly, over the same period, Northern Rock has become the dependent role on the wholesale money markets for the majority of its financing (Thal Larsen, 2007). It means that the way of Northern Rock’s financing over-depend on wholesale money market. Differ to other bank s’financing ways, most financing resource come fromfinancial institutions. Northern Rock’s capital was comprised by quarter of retail deposits and three-quarter of wholesale market (Milne and Wood, 2008), it main through labor, issue bonds and to sell asset-mortgage securities for financing (Table1). Compare to the British largest mortgage institution, HBOS’s financing resources just took 43% of wholesale market. So, Northern Rock’s major capital depends on wholesale market which was easier impacted by supply and demand of market capital.Except that,the original financing resource of Northern Rock was suffocated. Impacted by the liquidity of global currency market due to the Subprime crisis of America, the stable financing resource of Northern Rock was hardly achieved. And also, investors had already no interest in mortgage asset; this is a serious hit for Northern Rock which depended on lending market for financing. According to the analysis of marketing experts, in order to achieve the aim of expected growth, Northern Rock should totally re-financed ￡18 billion which by mortgage asset securitization (Nesvetailova and Palan, 2013). However, due to the impaction of American Subprime Crisis, most investors have no interesting in mortgage asset, and also the panic of British Subordinated debt market has already occurred. Obviously, the door of British Credit market has been closed, it was a serious attack for Northern Rock bank which mainly depended on credit market for financing.How to address and manage:In order to stop a systemic banking crisis, the UK Treasury, the bank of England and the Monetary Authority has taken measures to rescue capital injection and deposit guarantee. Therefore, Northern Rock began to take some ways to address and manage the risk of bank run.Government and The Central Bank joined in addressing the bank run of Northern Rock. Actually, at the beginning of liquidity crisis occurring, the Bank of England did not injection fund for Northern Rock bank, and also did not decrease the discount rate, the central bank had no any consciousness about the crisis would affect NorthernRock bank’s liquidity. However, in August 2007, in order to eliminate Northern Rock bank run, the UK Treasury, the bank of England and the Monetary Authority capital injection by 25 billion pounds (Alan and Frank, 2008). Except Northern Rock, the Bank of England also expanded capital injection for banking system, and injected ￡10 billion for capital market that aimed to solve the liquidity problem. In February 2008, Chancellor Alistair Darling announced the nationalization of Northern Rock, bringing forward legislation ‘to take Northern Rock into a period of temporary public ownership’. The Chancellor explained that Northern Rock would ‘continue operating as a bank on a commercial basis’ and that ‘savers’ and depositors’ money’ would remain ‘safe and secure’ (Rosa M, 2008). +critical assess:Critically recall a series of intervention that government and central bank done, the bank run of Northern Rock has been addressed and calm down while the British financial panic was controlled. Nevertheless, before the banking system crisis breaking out, the central bank refused to inject capital (Mcllory, 2008), beside that there was no decreasing of discount rate. But the Financial Service Authority was more optimistic that there was no need to inject capital for banking system, the behavior could be as a major reason of the banking system crisis. In case of financial panic intensified, the British Financial Authorities changed the original omission of the mind, and eventually forced the financial assistance applied for banking system and Northern Rock’s deposit guarantee (Bauman, 2011). The reasons why the central bank chosen to inject capital and guarantee deposits was that the Regulation Authority had confident of Northern Rock’s ability to pay back, the authority thought that Northern Rock just had temporary liquidity problem. On the other hand, the Regulation Authority afraid that Northern Rock’s crisis would expend to the whole financial system. However, the members of European Union paid attention on the support by the British government of whether involved violation of market competition or not, while the European Union believed that it belonged to an emergency rescue. Totally speaking, special situation should be deal with by special method, injecting capital has already had some affection for remit depositors’withdrew.Through the British Central Bank injected funds for Northern Rock bank, it still could not change the nervous situation of the market. Following that, Northern Rock declared for the public that the normal business operate as usual. Faced with the panic of the market (Turner, 2009), the solvent Northern Rock has strengthen the declaration on normal business, and stated that Northern Rock would try the best to secure the safety of customer’s fund in order to stabilize customer’s panic. Moreover, Northern Rock published an open letter of Chairman on home page to declare the determination of protecting customer’s funding. And also, major newspaper of the UK published the determination of Northern Rock. Meanwhile, the spokesman of British financial supervision bureau stated that these regulated financial institutions were operating very well due to better economic situation and financial institutions have sufficient capital to face the crisis (Joanna and Nazim, 2011). Generally speaking, these methods play a bit role to relive the anxiety of customers, many market experts show optimistic view to agree with that. (Hyun Song, 2008)+ Critical assess.The fact that the news had been leaked to the BBC before any official announcement was made by Northern Rock Bank, government and the British Authorities (Treasury Committee Press Notice no. 88, 2007). As known that, the best benefit of public news is quickly respond speed which is the pivotal. Especially by internet that could not been compared by other media methods. Northern Rock announced news to the public by the internet, news and chairman’s clarification, in which made viewpoints and information together and spread all over the world. Northern Rock did not shuffle release some innocuous statements in various suspicions and accusations, instead of opening everything and responding all, and sincerely answered and communicated with customers and media in order to bring Northern Rock out of the panic crisis. This behavior quickly spread and widely covered, and got agreement from the public. Despite, during Northern Rock declared information just was the statement of onlyone of the Northern Rock bank because of the public always with dainty psychological, referred to the fact of the bank run cannot been sure for the public. Besides, information announced was orally which just temporary calm down customers and depositors’panic, and did not actually addressed the bank run of Northern Rock. The most important thing for Northern Rock should ensure how to address the bank run and protect customers and depositors’ benefits.Importantly, Northern Rock actively sunk liquidity (Milne and Wood2008). As known that, the uncertainty about liquidity needs of Northern Rock resulted in bank to hoard liquidity rather than lend it to market for circulation, which caused an unsmoothed liquidity in wholesale markets while the LIBOR reached the highest record levels (Chart1). Therefore, except the capital injection by the UK Treasury, the bank of England and the Monetary Authority, Northern Rock through a sset sales and restructuring to obtain liquidity, too. It was reported that Northern Rock has separated and sold 100 billion pounds mortgage debt. In the fact, there was 1billion pounds of commercial insurance loans have already been sold in July 2007 (Hyun Song, 2008). Furthermore, the Chairman of Northern Rock has publicly called some institutions to acquire Northern Rock. It was said that the British Lloyd’s bank and some foreign banks had the intention to acquire Northern Rock. +critical assess.Before the bank run, the main finance sources of Northern Rock were retail deposits, wholesale deposits, securitization and asset-mortgage-securities which made the bank thought the financing channels were diversified and stable. Even increasingly rely on securitization and asset-mortgage-securities, which made long-term security to take majority percent of financing needs, this made Northern Rock was easier crashed by market breakdown because of liquidity lock. Northern Rock sold asset to protect the benefits of depositors (Lowenstein 2008), and further expand the range of guarantee. Restructuring asset played an effective role in addressing and easing the liquidity problem. However, the method coming late, the process of sale asset was a long time plan, and could not solve the impact on Northern Rock. Moreover, some financialinstitutions announced that a lot of losses occurred due to the affection by the Subprime crisis. It meant that there would be no extra abilities to purchase Northern Rock’s assets for other financial institutions. Meanwhile, the main credit Rating Authorities declared that the credit rating methods wound be adjusted, but the credit rating of Northern Rock securities was decreasing. Totally speaking, through asset sale and restricting to obtain liquidity was not a perfect method for Northern Rock, but faced the emergency bank run risk there was no other emerge way, the method still played affection on some extend.Recommendation:The prior recommendations should be suggested to regulators (Financial Services Authority, 2008). Liquidity problems of Northern Rock bank and other banks highlighted that improve the management and supervision of liquidity risk is vital. The regulation authorities should strengthen the supervision and management of liquidity risks. Most financial institutions did not predict the financial crisis from 2007 to 2009. It would like to specially point out that many financial institutions underestimated the risks of liquidity and the serious probability of market breakdown. So, the regulation authorities should stable the supervision principles and management of liquidity risks. Besides, Bank regulators should strengthen the financial regulations system of liquidity risks (Dorn, 2010). For example, banker regulators can establish the standards of liquidity risks, risk monitor tools and practice notes.According to the true situation of Northern Rock bank, the policies of liquidity risks were limited to help pulling through short-term liquidity crisis. Therefore, a significant portion of liquidity reserve locked of liquidity assets, and Northern Rock had no indeed contingency plan for reply the several days’ bank run. It was suggested that not only Northern Rock, including other financial institutions should plan ahead project to prevent liquidity problem (Credit Magazine 2008). In addition, the structureof Northern Rock mainly focused on medium and long-term financing channel, the financing model and bank structure should be change, short-term financing channels were better for liquidity. In terms of Northern Rock self, strengthen cooperation of each department is very important. Before the bank run occurring, the Bank of England and the Financial Monetary Authority lacked of necessary communication which resulted in no capital injection in time. After the bank run, the Central bank, the British Treasury and the Financial Monetary Authority combined action to address the crisis which played an important role (Nesvetailova, 2007).Also, there are some recommendations should be supported to depositors, investor and related customers who care about the financial market. For example, customers should enough know banks’ financial situations, crediting rating, capital structure and financing sources before investment activities. Such financial information can effectively help customers to make a right choice for investment.To sum up, the purpose of this paper has been to address the need for further research in risk management of Northern Rock ban run by analysis of the process of bank run identified, and both government and the central bank injected capital for Northern Rock to solve the bank run and Northern Rock self actively adjusted capital structure. In terms of these address methods were critically assessed for each one. Importantly, recommendations for Northern Rock, regulators and related customers were efficiently in future financial market. 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本科毕业设计(论文）题目：A企业财务风险管理研究系别：专业：班级：学生：学号：指导教师：A企业财务风险管理研究摘要本文以A企业财务报表为基础，以风险管理和财务比率的有关理论和研究方法为依据，通过流动性分析、长期偿债能力分析、经营效率分析三种方法来分析A公司三年财务报表和年度报告，运用现金比率,存货周转率，应收账款周转率等财务指标来判断企业财务风险存在的主要问题。

得出应收账款和存货管理机制、财务人员的风险意识以及财务管理内部控制制度等方面存在问题，并就此提出树立风险意识，建立有效的风险防范处理机制和建立财务风险识别预警系统等相应的防范措施。

本文观点可供并为同行业其他企业参考。

关键字:风险管理；财务风险；财务比率A enterprise financial risk management researchAbstractTaking A financial statements of the enterprise as the basis，risk management and finance ratio of relevant theories and research methods as the basis，through the liquidity analysis, long-term debt paying ability analysis, operation efficiency analysis three methods to analysis of A company three years financial statements and the annual report, the use of cash ratio inventory turnover，accounts receivable turnover and financial data to determine the financial risks of enterprise，the main problems of accounts receivable and that inventory management mechanism is not sound, financial personnel's risk consciousness and the internal control system of financial management the reasons and puts forward set up risk awareness, set up effective risk prevention treatment mechanism and set up A financial risk identification early warning system for corresponding preventive measures, and for most other enterprise to provide the reference。

本科毕业论文外文文献及译文文献、资料题目：What is the financial risk management? 文献、资料来源：期刊文献、资料发表（出版）日期：2011.5院（部）：商学院专业：财务管理班级：财务123姓名：任文豪学号：20120913111指导教师：张玉华翻译日期：2016.6.7外文文献：What is the financial risk management?INTRODUCTIONFinancial risk is the inevitable outcome of the modern enterprise in the face of market competition, especially in the development of market economy in China is not sound conditions is inevitable.Sales enterprise financial risk evaluation in this essay, on the basis of the proposed financial early warning mechanism and specific expounds the specific duties of early warning mechanism, finally discusses several measures to strengthen the guard against enterprise financial risk.Key words:Sales of the enterprise;Financial risk management;Avoid adviceThe research backgroundFinancial risk is the inevitable outcome of the modern enterprise in the face of market competition, especially in the development of market economy in China is not sound conditions is inevitable.Financial risk has the objectivity, inevitability and uncertainty, which requires the enterprise owners, operators should clearly realize that the objective existence of the risk.In the past, many enterprises caused by a lack of understanding of financial risk, management does not reach the designated position, the enterprise huge economic losses, even bankruptcy.How to enhance the enterprise risk management consciousness, strengthen the various possible causes of the financial risk of uncertainty scientific analysis and forecasting, from different angles, different levels and take different measures to prevent and avoid all kinds of financial risk become enterprise management priority.The concept of financial risk managementThe connotation of financial risk managementEnterprises in the process of operation and management, because of various uncertain factors, may lead to the enterprise's financial activity in one area or a certain link problems, cause enterprise funds, goods and other materials on the value of property loss, resulting in a loss of corporate profitability and solvency, this possibility is the enterprise financial risk.Under the condition of market economy,financial risk is objective existence, to completely eliminate financial risk and its impact is not realistic.National politics, economy, culture and the external environment and internal environment, such as business people, goods, content of the complexity of the instability of the market price, the uncertainty of supply and demand and the diversity of information determines the market economy under the conditions of enterprise financial risk exists objectively.Williams and was published in 1964, Hans's book "risk management and insurance", said: "the risk management is based on the risk identification, measurement and control, with the lowest cost of the degree of risk to minimize losses caused by management".Refers to the enterprise financial risk management in the full knowledge, on the basis of the financial risk faced by various scientific and effective means and methods, on all kinds of risk prediction, identification, prevention, control and processing, at the lowest cost to ensure the continuity of enterprise capital movement, the stability and profitability of a financial management activities.Financial risk management is the organic combination of risk management and financial management of a new management field, the key lies in the enterprise management departments at all levels in the organization, instruction in financial activities, by identifying, testing, the risk of objective existence in the process of enterprise capital movement, to take effective preventive measures, with the minimum cost for maximum security.The content of the financial risk managementFinancial risk management activities throughout the entire process of financial activities, from the content mainly for funding risk, including interest rate risk, investment risk, liquidity risk, etc.(1) refers to the enterprise financing risk management in the financing activities due to the change of capital supply and demand of market and macroeconomic environment, financing structure and currency structure, term structure and the change of interest rates and other uncertain factors, the possibility of damage to the enterprise.(2) the investment risk management refers to the enterprises in investment activities, due to the influence of various factors is difficult to predict and control, the risks arising from the investment return rate of lessthan anticipated goal.(3) the funding liquidity risk management refers to the enterprise cash flow and cash flow risk which is formed by the inconsistent on time.Main show is cash, accounts receivable collection risks as well as inventory liquidation risk and so on.Sales enterprise financial risk evaluationThe influence factors of enterprise financial risk1, the enterprise financial risk management mechanism is not soundAt present, most of the enterprise financial risk management limited to internal to self analysis and control of various functional departments, there is no set up specialized agencies to enterprise operation and management activities of the financial risk analysis and management, management procedures incomplete, imperfect management mechanism, enterprise can't see the enterprise goals, identify, and reflect the influence of various risk factors, not in time to prevent and control, risk is inevitable.2, enterprise management system of enforcementTo establish and perfect rules and regulations, and constantly optimize, improve the existing system, is the enterprise standard management behavior, improve the management mechanism, effective way to carry out the management responsibility, but also identify risks, risk analysis, the effective ways to avoid risk.Enterprises to establish and perfect the rules and regulations, it is necessary to strengthen execution, if the enforcement, there will be to implement work inspection, does not reach the designated position, will lead to some employees in daily work to replace voluntary, "three violations" behavior is difficult to avoid, the hard to avoid the risk.3, lack of enterprise supervision mechanismIn the real work, caused by a lack of enterprise management personnel risk consciousness, cooperation consciousness is not strong, in daily work, only care about the part of your job, don't care about the operation and management activities of other departments, the enterprise internal lack of mutual supervision and mutual restriction of management mechanism, lead to the generation of financial risk.4, the lack of scientific enterprise financial decisionsScientific financial decision making, is the precondition of avoid financial risk, financial goals.At present, in the aspect of corporate financial decisions, generally there is the phenomenon of subjective or thumb decisions, the resulting decision is unscientific, unreasonable, resulting in a financial risk.5 recovery strategy, enterprise funds, income distribution policy is not standardEnterprise internal between various departments and enterprises and superior between, in fund management and use, profit distribution, as well as unclear responsibilities, management disorder phenomenon, cause low service efficiency of funds, capital of security, integrity cannot be guaranteed, the economic benefit of landslides, or even a loss.Liquidity can not get due compensation and the losses from the enterprise of its own funds and bank loans, unable to meet the growing demand, so we have to continue to expand the scale of loans, short-term loans for long-term investment, short and lend long shots.This aggravated the tension in the enterprise funds, reduces the enterprise anti-risk ability, inevitably cause the enterprise capital turnover difficult, unbecoming loan repayment capacity and scale, produce the financial risk.Enterprise financial risk1, capital structure is unreasonable, the ratio of debt financing is too high In the enterprise capital structure, relative capital source, mainly refers to the enterprise all capital source of equity funds and the proportion of debt capital.Due to reasons such as financing decision is not scientific, the enterprise capital source structure unreasonable phenomenon exists generally, some companies asset-liability ratio is as high as 70% above.Capital source structure is not reasonable that the enterprise's financial burden, a serious shortage of solvency.2, lack of foreign investment decision-making scientific, influence the realization of the expected returnIn the process of foreign investment decisions, as companies the feasibility of investment projects is a lack of thorough system analysis and research, combined with the decision is based on the economic information is not comprehensive, not real and decision-makers decision-making ability is limited, leading to the lack of scientificinvestment decision, make investment project cannot obtain the expected profits, not timely recovery of investment, and even produce huge investment losses.3, sell on credit than major, accounts receivable out of controlAffected by the market supply and demand, some enterprises in order to increase sales and expand market share, a lot of selling products sell on credit way, result in a great increase in corporate accounts receivable.At the same time, as companies in the sales process to understand the customer's credit situation, the debt paying ability is not enough, blind credit sales, cause accounts receivable is out of control, quite a proportion of accounts receivable long-term unable to recover, thereby causing loss to the enterprise loans.4, unreasonable structure of inventory, inventory turnover rate is not high Enterprise liquid assets, the inventory account for a relatively large proportion.Enterprise inventory level structure is unreasonable, inventory turnover rate is not high, the formation of overstock backlog phenomenon.This has occupied much of corporate liquidity on the one hand, on the other hand, enterprises for keeping the inventory must also pay a lot of storage costs, rising business cost level.At the same time, inventory backlog for a long time, also increases the loss of goods storage, bear the resulting from a decline in prices of obsolete stocks losses, makes the enterprise management benefit.In the enterprise financial risk management measures Establish financial early warning mechanism, strengthen the financial risk management1, the financial risk management organization systemIn order to effectively supervise and control the financial risk, the enterprise needs to establish a special responsible for risk management organization, with full-time risk management personnel, the whole process of enterprise risk management to the overall coordination and specific planning, focus on and eliminate the threat to the financial risk of enterprise survival and development.In view of the enterprise scale, structure, and many other factors, within the company may set up "risk management committee (risk management leading group)", is responsible for theorganization and leadership of enterprise financial risk management and coordination.In the risk management committee (risk management leading group set up under the risk management office (located in the finance, the finance director and director of the office), to be responsible for the daily risk management work, main responsibility is responsible for risk management information collection, selection, sorting, analysis, transfer and archive management, and regularly report to the company leadership issues related to risk management.At the same time, the risk management department to work closely with operations, personnel, storage and transportation departments, common standard of enterprise internal financial risk management.2, implements the comprehensive budget management, establish a short-term financial early warning systemUnder the premise of enterprise in determining the long-term strategic planning, should draw up various specific period management goal, according to each phase of the management goal, is the current of all kinds of earnings, cash flow, financial condition and investment plans, etc., expressed in the form of quantification, prepare the current comprehensive budget, implements the comprehensive budget management.Enterprise financial risk management departments to carefully check and analysis of the current budget execution, budget implementation for corporate leaders early warning information, make enterprise can promptly revising the budget target, ensure the scientific nature of the budget, to early take measures to solve the problems existing in the budget implementation, ensure that enterprise management activities do not deviating from the expected target, ensure the smooth conduct business enterprise and the smooth completion of the budget targets.3, establish the index system of financial analysis, establish the financial early warning management system for a long timeFor enterprises, the establishment of short-term financial early warning management system at the same time, also according to the enterprise long-term strategic planning, establishing enterprise assets profitability, solvency, profitability and financial flexibility index system of financial analysis, establish the financialearly warning management system for a long time.Through the inspection, analysis of the index system, timely correcting deviating from the expected goal of enterprise management activities, to ensure that the enterprise long-term strategic target realization.Enterprise financial risk prevention measures1, serious analysis of internal and external changes, improve the enterprise ability to adapt to the financial management environment changes and strain capacity Although the macro environment of financial management in enterprise, the enterprise can't exert influence, but can grasp by analyzing the change trend and regularity, timely adjust the financial management policy, respond in a timely manner.To the enterprise internal financial management environment changes, the enterprise can be achieved by careful analysis research, develop a variety of contingency measures, timely change of financial management, improve the enterprise ability to adapt to the internal financial management environment changes and the strain capacity, harness and grasp earnestly, thus reducing environmental change brings to the enterprise financial risk.2, we will further improve the enterprise management rules and regulations, improve executionEnterprise financial risk exists in all aspects of enterprise management.Therefore, we should conscientiously carry out investigation and study, from different angles, different levels, organizational system leak.By further perfect the enterprise financial management rules and regulations, improve execution, strengthen financial foundation work management, achieve the goal of prevent and control the financial risk.3, establish effective staff training mechanism, strengthen the quality of employees training, on thought, implementation of knowledge, to establish a "people-oriented" management concept, improve staff awareness of risk managementOne is to grasp the leadership, corporate leadership team members to the agenda, the financial risk management work research, form a consensus, improve on thought of risk management and operation and management and economic benefit, riskmanagement and the understanding of the relationship between enterprise development.Second, in view of the possible financial risk, pays special attention to the risk management department and the relevant business units and other key post personnel training education, take conference propaganda, special education, job training, and other forms of effective education, improve the understanding of financial risk management, to strengthen the understanding of the rules and regulations, further clear responsibility.Stimulate staff's work enthusiasm and initiative, and promote the employee in risk management from passive to active participation in management, forms the enterprise internal risk management of the whole situation, effectively reduce the enterprise financial risk.And specific measures to guard against enterprise financial risk1, enterprise of fundraising risk preventionAccording to the enterprise actual situation, establish the reasonable financing plans.With the expansion of the scale of enterprise management, enterprise can according to need and may arrange the right amount of debt, to make reasonable financing plans.In order to guarantee the rationality of the financing plan, the enterprise should use the relevant index to the assessment of solvency of financing plan for testing and evaluation, such as corporate debt, its quick ratio is less than 1, the current ratio is lower than 2.Only in this way, can minimize risk, improve the level of corporate profits.At the same time, the long and short-term borrowing must carry on the reasonable arrangement, make its structure more reasonable, the repayment time, should be determined rationally to prevent financial risks due to the debt collection.Serious analysis of changes in interest rates, reasonable financing arrangements.Enterprises in the capital market financing activities, should seriously study the capital market supply and demand situation, according to the movements of interest rates, grasp its developing trend, and makes the corresponding financing arrangements.In the interest rate at a high level period, less as far as possible to raise funds, or only raise much-needed short-term funds.In interest rates in the period of transition from high to low, should as far as possible to raise funds, to need short-termfunds, should use a floating rate plan breath way.When interest rates low, financing is more favorable.In the interest rate in the period of transition from low to high, should actively raise funds for a long time, and try to adopt the fixed rate plan breath way. 2, the enterprise investment risk preventionSales companies to invest more for construction investment in fixed assets, when making decisions, must set up a scientific system of investment decision, to make scientific investment feasibility analysis, especially the analysis of the return on investment, in the benefit estimation, the use of the data, Stan must through reasoning, ensure that use the data accurately.The conclusion of the project is feasible or not, should grasp the investment payback period, to evoluate key evaluation index, net cash flow, etc.Only in the project feasibility analysis link financial gate effect, to minimize the investment decision-making risk.Intensify coordination with government functional departments, improve the external investment environment, reduce the investment risk.In the construction of fixed assets investment, the enterprise should strengthen the communication with the urban construction planning departments of the government, the coordination work, to ensure that in the realm of investment projects into the government plan to avoid the contradictions between the overall city planning investment projects and the government brought about by the investment risk.Strengthen the cultivation of investment management professionals, improve the financial ability of investors.Investment is inherently has the characteristics of "high risk, high income", the investment subject should have a strong sense of risk management, investment management personnel should be understand technology, understand the financial and understand financial knowledge, understand management, and other inter-disciplinary talent, but also have to have a willingness to take risks, dare to the spirit of innovation.Therefore, the enterprise must strengthen the cultivation of investment management professionals, improve the financial ability of investors, ensure a safe investment.3, enterprise capital recovery risk preventionTo perfect the accounts receivable management system, further standardize thebehavior of credit management.Enterprise in the formulation and implementation of the instalment payment credit policy, must fully consider reducing the number of the account receivable amount as far as possible and the holding time, reduce the management cost of accounts receivable, should choose to marginal profit is greater than the total cost of the management of accounts receivable credit policy, to further standardize the behavior of enterprise credit management, to prevent bad debt losses caused enterprises, strengthen the management of enterprise sales money safe recovery.Enhance sales personnel sense of responsibility and the risk consciousness, establish risk mortgage rates.Enterprise sales people pay a certain percentage of sales revenue of the extraction, part of which can be used to pay sales staff salaries, bonuses, others as risk mortgage rates.In this way, can prompt sales staff for each business transaction is treated with caution, for each customer's credit level and solvent are serious evaluation, sales staff and improve the sense of responsibility, do sell products to, and to ensure the back payment for goods, so as to reduce the accounts receivable, avoid bad debt losses.In short, financial risk management is an important content of modern enterprise financial strategic management not only, also is an important part of the whole enterprise management.Strengthen the management of risk has become a modern enterprise management an important content.Only full and comprehensive attaches great importance to the enterprise financial risk management, set up the correct concept of risk, be good at to the uncertainty of natural and social environment factors in scientific prediction, take various measures to prevent, can effectively avoid all kinds of financial risk, ensure enterprise capital safety.中文译文：什么是财务风险管理？介绍：财务风险是现代企业面对市场竞争的必然产物，尤其是在我国市场经济发育不健全的条件下更是不可避免。

Corporate Finance Assignment(Analysis report of Haier)name： class: accounting 123 number：1、Company introductionHaier was incorporated in 1984, entrepreneurship in 26 years, insist on entrepreneurship and innovation spirit, create world famous brand from a shaky business has become a global collective small factory owns more than 70,000 employees, 2010 turnover 1357 billion yuan of globalization group company. "Haier" has become the first brand for global white goods, and was Newsweek (Newsweek website named as the world top ten innovative company.2、Financial ratios(1) Short-term solvencyCurrent ratio: （current assets）/ (current liabilities). The higher of the ratio. the richer of a firm’s capital turnover and the stronger of the firm’s solvency. Current ratio is a firm’s representative indicator to evaluate the solvency. The world’s universally acknowleged criterion is 2:1Quick ratio:(current assets-inventory)/(current liabilities).It’s a measure of a company’s liquidity and ability to meet its obligations. The general criterion is 1:1(2)long-term solvencyTotal debt ratio:(total assets-total equlity)/(total assets).For the creditors, The higher of the firm’s total debt ratio, the more liabilities it has and it may have a high potential profit margin, but at the same time, they have a high loan risk to take on. (3)Asset Management, or Turnover, MeasuresInventory turnover:(cost of goods sold)/inventory. The faster ths turnover is, the stronger the liquidity will be, so high inventory turnover ratio shows that the firm is able to change directions quickly.Receivable turnover: sales/(accounts receivable).It represents the ability that the company receiving their payment. The management efficiency is good when the ratiois high.Total assets turnover: Sales/(total assets). It measures how efficient a company use its assets.(4)Profitability MeasuresProfit margin:(net income)/sales. It measures how much the company can earn per dollarROA：(Net income)/(total assets).It gives the idea that how efficient the management is at using its assets to generate earningsROE:(Net income)/(total equity). It measures a company’s profitability by revealing how much profit a company generates with the money of shareholders have invested.(5)Market Value MeasuresPrice-earnings ratio:(price per share)/(earnings per share) It measures how much investors are willing to pay per dollar of current earnings. High PEs are often taken to mean that the firm has significant prospects. For future growth. Of course, if a firm has no or almost no earnings, its PEs would probably be quite large.Market-to-book ratio: (Market value per share)/(book value per share).It compares the market value of a firm’s investments to their cost.3、Calculations and Analysis the financial ratios (2010—2012) (1)SolvencySolvency is an important index to reflect a firm’s financial conditions and operating ability. A low solvency not only reflects that the firm doesn’t have enough money to meet the need. But also reflects the firm may not have the ability to pay the debt, even with the risk to face bankruptcy.Short-term solvencyWe can get through the Current ratio, Quick ratio and Cash ratio to analysis the short-term solvency.Current ratio=current assets/current liabilitiesQuick ratio=(current assets—inventory)/current liabilitiesCash ratio= (cash+CE)/current liabilitiesThrouth the form, we can see, three indicators have reached the lowest in 2011, butshort-term solvency basically unchanged in 2011 and 2012. By looking at the data, we know, the value of Haier is still within the normal standard in the industry, but it’s numer is obviously low, and when current ratio reach at 100% , the short-term solvency is higher, so, if the short-term solvency is not high, haier itself will face a certain degree of risk of insolvency.However, Quick ratio and cash ratio of Haier are the first, Current ratio is also in the industry iforefront, that means many companies in the industry are also faced with a certain degree of debt risk.(2) profitabilityProfitability means enterprise profit ability in a certain time period. Whether the business activities of enterprises with strong profitability, is very important to enterprise's survival and development. For haier, it is a large group enterprise, if there is no high profit support, to gain the ability to continue to develop is obviously not possible. I will analysis haier's profitability by calculating main operation margins , net profit margin, ROI and ROE.Through consulting relevant data and annual report, haier's net profit margin is slightly higher than the industry average, but it’s slightly lower than competitors—gree electric appliances; Main operation margins of Haier is behind the above competitors. This situation means that Period charge is too high. And it takes too much negative effect on the profit growth of the firm. ROI of Haier is the highest in above companies and remains stable in nearly 3 years, so, it means that asset utilization efficiency of Haier is good and it has a stable and lasting profitability. ROE reflect the shareholders' income level and it’s used to measure the efficiency of using their own capital by the company. The higher its’ index is, the higher the investment benefits. ROE of haier has reached the industry ceiling. It’s higher than that of greeelectric appliances. It means the profitability of Haier is strong and it’s in the leading position in the industry.(3) Working capabilityWorking capability depends on turnover speed of assets, the running status of it, assets management level and other factors.Such as asset velocity, as a general rule, the faster the turnover of the assets is, the higher the use efficiency of assets is. So it means working capability of assets is strong. Working capability indexes includes receivable turnover, inventory turnover and total assets turnover.（receivable turnover）=net credit sales/accounts receivable（inventory turnover）=cost of goods sold/ inventory（total assets turnover）=net sales/ total assetsturnover and total assets turnover keep reducing for 3 years, it suggests the working capability of Haier is decreasing in that 3 years.Haier present the downward trend, yet it’s still in the high level in the industry4、conclusion(1) SolvencyAt present, the quality of the company's assets is almost good, liquidity and security are high.2010-2012, Haier reinforce to raise capital through long-term loans and the correct use and operation effectively. By these ways, the firm get a good profit. So while short-term debt paying ability is poor, the long-term debt paying ability is not weak. In order to the company's long-term stable development, it’s necessary for us totake positive measures to further improve the debt paying ability.(2)profitabilityThe operating income of haier has improved dramatically in 3 years, and main business profits is also at a high level in the industry and profitability is increasing year by year. But when we are busy expanding sales and the scale of production, at the same time, they have exposed increase problems of the sales cost, financial cost and management cost. So that the net profits has not increased in proportion. In a word, when Haier wants to expend sales and pursuit Innovation, they should pay much attention to improve the operation and management and control the increase of operating cost. By these ways, they can maintain improving steadily of profitability at the time they have the higher basis of it.(3)working capabilityFrom the perspective of the whole operation, Qingdao haier operating capacity is higher than others, but in order to the each given index, they have a downward trend in recent years. The firm should pay much attention to maintain the stability of the occupancy and revenue growth in the future. In a word, Now, the company's overall trend is positive, and it’s in a high speed period of development, there will still be strong further future development potential.5、References（1）《海尔集团财务分析及业绩评价》—涂锐（2）沙洁. 企业财务报表分析[J]. 财会研究, 2004,(10)（3）华杰.浅谈如何分析企业财务报表[J].内蒙古煤炭经济,2009(4):65-67（4）《会计专业英语》第四版；——常勋，肖华（5）Charles T.Horngren. Introduction to Management Accounting. Prentice Hall.1998。