In the times of knowledge economy, the financial environment of enterprises has changed largely, so the current financial report system of China has not satisfied the accounting information users' demand for the financial report. Three deficiencies existing in the current financial report system are analyzed in this article, i.e. lacking in the relativity, lacking in the timeliness, and lacking in the reliability. And corresponding reform directions have been proposed, such as using multiple

more »

... surement bases simultaneously, extending the scope of financial information disclosure and ensuring the information relativity, establishing the real time reporting system and ensuring the timeliness of information, and reducing the colors of the financial report and ensuring the reliability of information. In the 21st century, the development of the economic globalization and the multi-directional development of the competition promote the world economy to enter into a new social economy form, i.e. the knowledge economy. Under the influences of the social economic form which basic characters include globalization, informationization, the networking and the knowledge-driven, the financial environment of enterprise has also changed largely. For example, the management environment of enterprise changes unendingly, and the production and operating activities of enterprise are more and more complex, and the fluctuation in price will be more frequent and drastic comparing with past, and the industrial competition is more and more drastic, which make the uncertainty of the enterprise management is higher and higher. Therefore, the current financial report system of China has not satisfied the accounting information users' demand for the financial report. Though the current financial report system follows the special accounting rule and adopts the standard and current format of presentation, but with the advent of the knowledge economic times, its advantages such as synthesis and standardization have not remedied the deficiencies shown because of the lagging behind the change of the economic environment. The current financial report system urgently needs a profoundly reform oriented by accounting information users' demand. The deficiencies existing in the current financial report system under the new social economy form are analyzed in this article, and advices are provided for the reform direction of the financial accounting report system of China.