Analysis of Accounting Information Distortion Based on Contract Theory

The information is necessary for the surveillance on contract,and the information production which refers contract may extend to any related contracting litigant.The investors need some information concerning the investment expectation repayment and the risk,and the regulatory authorities also need it to stipulate the appropriate quantity about future cash flow and financial situation.However,the moral hazard and the adverse selection resulting from the opportunism behavior on the conditions of information asymmetry leads to serious Accounting Information Distortion,which incurs a lot of censures on the reliability of accounting information.