The Effect of the Development of Financial Market on the Theory of Accounting

The effect of financial market on accounting is explored and analysed as three parts. Firstly, analysing the change of accounting objective from the concept of trust and duty to the concept of useful in decision making. It is changed due to the special demand of floating shareholder for information under the condition that the development of capital market makes enterprises to raise fund socializedly. And secondly, analysing the effect of financial instrument for innovation on the recognition and measurement of accounting. The mode of motion and characteristic of special value of financial assets and financial liabililies offer reliable measurement and operable method of accounting for them to adopt accounting of just and fair value; and lay a theoretical and realistic basis for breaking through principle of realization in traditional accounting. And finally, analysing problems with which accounting will faced when it is made by innovation to announce the risk of enterprise; and exploring new thinking of financial report.