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Earnings per share are important indicators that can reflect the profitability of a listed company, using the monetary unit to measure financial position and operating results. Be accompanied by the establishment and development of socialist market economy, the effect of earnings information playing is more and more important, the true and complete accounting information provide an important information support that promote China’s socialist market develop healthily and orderly, earnings information is also an important basis for investors, creditors, the pubic stakeholder to make decision.On the first of January,2007.new accounting standards carried out formally, it requires that the listed companies disclose not only the basic earnings per share, but also the diluted earnings per share, then those two indicators can bring more effective information to investors to make more accurate investment decision? After the promulgation of new accounting standards, are the information contents of EPS increase than before, whether the DEPS has more information than the BEPS? This paper uses event study methodology, to research two aspects that whether the earnings information has information contents. First, it analyzes and compares the Average Abnormal Return and the accounting information of the year 2006 and 2008, finding out that whether the effectiveness of China’s securities market has improved. Secondly, under the new accounting standards, for the requirement of all listed companies must disclose diluted earnings per share, the paper analyze and compare the information content of BEPS and DEPS of 2008,finding out that whether the information content of DEPS has more information than BEPS. The results show that:The AAR and CAAR of 2006 and 2008 to some extent, compare to 0 has significant differences, indicating that market response some of accounting information ,but this response is weak, accounting earnings has a little information .In addition, the AAR of 2008 has more difference than 2006,the CAAR of 2008 is also. It shows that the reaction speed and efficiency of 2006 is not good as 2008,it indicates that efficiency of China’s market has increased. However, when the company issued a“good news”(+UEPS),CAAR appeared a most significant decline of the process, and when the company issued a“bad news”(-UEPS),CAAR appeared a significant increase of the process .It shows that the capital market in China is not rational, and the abnormal action of 2008 is deeply than 2006.it indicates that capital market still cannot distinguish different types of information ,is still a weak efficient market.Through the regression model, the paper find that the BEPS and DEPS disclosed in the sample companies both did not pass the significance test, indicating that these two indicators don’t have strong explanatory power, accounting earnings has no information content. In comparison, DEPS has mare information content than BEPS; DEPS is more helpful to investors on making decisions. On the whole, the new accounting standard made this change acquired some positive results.
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