Ifrs in China

2810 Words Aug 8th, 2010 12 Pages
Introduction China has more than 5000 years of history, and was a mysterious country to most occidental people. Because of the influence of the culture and history, China use to be closed to foreign countries until 1979. Chinese people have their own accounting rules that are totally different from occidental countries’ accounting rules. With the development of China’s economy and the implementation of the reform and opening policy, Chinese economic system became from planning economy to free- market economy, more and more occidental countries focus on China -a fast developing country. More and more international cooperation and trade appeared. In order to get the best investment, to know well Chinese accounting system …show more content…
The accounting system reform cannot be stopped until it is completely accepted by foreign companies, which has a long way to go. But only if China can do so, the global trading in China can get the most benefit and the investment.( Jiashe Ge. Facing the New Century-Focusing On the Trend of Chinese Accounting.1999)
Chinese Accounting Standards (CAS) Deeply influenced by the culture, tradition, and the social system Chinese accounting system is tightly controlled by the government which is Ministry of Finance of China. According to Wei-guo Zhang (Weiguo Zhang. China’s challenge: Building an accounting system. 1996), this feature is the “unique feature of Chinese accounting methods.” Ministry of Finance is the most powerful financial department of Chinese government which handles all the businesses of finance, accounting, and economics. It has the major power of decision-making of accounting standards; cares about the setting of accounting standards; monitors the implement of the accounting standards and modifies the accounting standards. According to Reaf Lawson (Rael Lawson, Jiliang Yang and Hongqi Yuan. Accounting in China: A Long Journey to The Rebirth Of A Profession. 2009), the current framework for accounting in China consists of four levels. The first level consists of the accounting law which was issued by the National People’s Congress in 1985 and last revised in 1999; the second level includes administrative regulations distributed

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