Firms listed on A share market must prepare its financial statement based on Chinese accounting standards; B share listing firms must prepare its financial report based on both Chinese and International Accounting standards; as to issuing both A share、B share firms must prepare its financial statements based on Chinese accounting standards and IAS. This study selects firms both listed on A/B shares in Shanghai and Shenzhen Stock Market during the period of year 1999~2006 as samples and intends to examine whether adopting IAS firms have higher transparency on its financial report compared to firms adopting Chinese accounting standards. Respectively using (1) timeliness (2) absolute value of discretionary accruals as financial transparency proxy variables, empirical results show(after controlling other variables): The financial transparency of adopting IAS is higher than adopting Chinese accounting standards when using (1) as financial transparency proxy variable (the hypothesis is not supported); there is no evidence showing that financial transparency of adopting IAS is higher than adopting Chinese accounting standards when using (2) as financial transparency proxy variable (the hypothesis is not supported). To examine the relation between foreign institutional investors’ holding ratio and timeliness / absolute value of discretionary accruals, no evidence showing foreign institutional investors’ holding ratio is positive (negative) related with timeliness / absolute value of discretionary accruals, (the hypothesis is not supported either). Firms listed on B market are mainly invested by foreign institutional investors, this study further examines the interaction effectiveness of financial report transparency between adopting IAS and holding ratio of institutional investors, it is not significant related.