Chinese Accounting System Essay
Professionalism vs. Statutory Control
“Even after the recent reforms ···accounting practices remain that reflect the state-controlled nature of the Chinese economy”（Adhikari,1995,Accounting for China） In China, accounting law is established by The Department of Administration of Accounting within the Ministry of Finance, accounting profession plays a weak role in this process and this no evidence prove it shown its social status. Like all Statutory control reform, accounting standards are one part of law, someone who dare to make false account will be prosecuted …show more content…
Secrecy vs. Transparency
There is one thing for sure is that the majority Chinese companies tend to have less disclosure given to the public, except those listed companies have to report to the CSRC(China Securities Regulatory Commission), the rest of the companies are usually keep their business information as a secret and there is no restriction to those non-listed countries.(Blake.J, Gao.G & Wraith.P, 2000, 1-11 ) Generally speaking the total level of disclosure is very low.
Long-term vs. short-term
According to the accounting structure, it is not difficult to know that China is taking Balance Sheet as the priority, what they need is aim to a long-term focus. In this way it is much easier to achieve the sustainability on the financial position. However, both balance sheet and income statement can be seen in Chinese accounting report, the difference of those two report form is that income statement mainly for short-term management decision making use. The balance sheet is mainly focus on reporting to public and government, which is also use for making company strategy.
Blake.J, Gao.G & Wraith.P, 2000, Joint ventures in China - accounting implications, Managerial Finance. Patrington: 26 (5) 1-11
Chan.M.W.L & Rotenberg. W, 1999, Accounting, accounting education, and economic reform in the people's Republic of China,