"Under the conditions of market economy,due to competition and the growing risks,accounting the objective economic environment of increasingly high degree of certainty,in order to strengthen enterprise with the ability of the risk,to investors as the main users of accounting information and more attention and uncertainties related to the risk of information disclosure.Thus,the application of the principle of caution become inevitable.
In the western free market economy system and private enterprises and investors,have paid great attention to the capital preservation,thus according to the principle of caution to carefully relating to the recognition and measurement of the problem in a certain extent,can effectively profits of false prosperity.From the book,enterprise seems to make money,but its original erosion,but net profit of enterprise will be false tax revenue as a real bonus,paid wage increase,will inevitably lead to enterprise economic strength.And implement the principle of caution,can properly keep the enterprise's economic strength,from financial risk for possible accidents and events ready,enhance competitiveness.
But at present,the application of the principle of caution by financing environment and legal environment etc.,responding to become a choice of low-alcohol robust,there must be many enterprises,and the limitations of accounting personnel are not enough attention,the application of the principle of caution and its existence in understanding the fuzziness and randomness of application.
The accounting standards for enterprises - basic standards referred to in article 18:"accounting should follow the principle of caution,reasonable calculation the possible loss and expense.But the new system is more clearly stipulates:"the enterprise in accounting,shall follow the principle of caution,not much plan the assets or liabilities or expenses,less plan,but not ready" secret plan.
However,the principle of prudence that its own limitation,how to use a need to discuss the problem.This paper will introduce the concept of prudent accounting principles,development process,the significance of the system,and expounds the principle of caution in accounting application,reveals the existing problems,and puts forward some Suggestions and measures."