Should China Adopt International Accounting Standards?.

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Should China Adopt International Accounting Standards? The International Accounting Standards Board (IASB) issued and developed the new International Financial Reporting Standards (IFRS) as new international accounting standards after 2001. In 2006, the Chinese government issued a new set of Accounting Standards for Business Enterprises (ASBE) which are substantially consistent with IFRS. As mentioned in the scholarly article of Li and Sun (2011), there are some primary differences between Chinese accounting standards and international accounting standards: the adoption of fair value , the accounting methods for the business combinations , impairment of assets , and the disclosure of the related parties’ transactions . Some causes of…show more content…
It is a significant topic for the Ministry of Finance of China and the Chinese government because China’s reform in accounting field will impact economy. Moreover, if China’s accounting pattern changes, it will also affect Chinese accountants, relevant scholars in accounting field, and the update in college educational content of accounting. The essential intention of this debate is to figure out if it is an appropriate way for the development of China. In this research paper, I will examine different perspectives towards this question from different relevant accounting scholars. Economic influences on the Adoption China’s socialist economic pattern is one of the biggest challenges for the adoption of international accounting standards. In the thesis written by Cong Sun (2011), who is a doctoral student majoring in accounting at the University of Birmingham, he argues that China currently does not have the necessary conditions to adopt international accounting standards. His study found the following: …the context of the formulation and adoption of international accounting standards mainly includes the following factors: civil society with the rule of law, corporate governance with the ability of continually rectifying deficiencies, capital market enhancing transparency and accountability, independent accounting profession with high standard, and so forth; these factors make up an indivisible whole. (Sun, 2011, p. 31) However, Sun claims that China currently lacks
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