Table of Contents
Significance of China in the Global Market 4
History of Accounting in China 6
Establishment of Accounting Standards 9
Financial Reporting and Auditing Requirements 11
Recent Developments and Impending Accounting Issues
China has a population of 1.3 billion whose per capita income has grown tenfold since 1990. An annual growth rate averaging more than nine percent over more than two decades has driven China to fourth place in the world economic league table. Many investors and potential businesses see China as an emerging market and potential location for foreign subsidiaries. China is characterized by intense competition and entrepreneurial activity in almost every field (Read and Partridge, 2006).
Some major advantages and also major concerns exist in multinational enterprises due to China's accounting system. As China is one of the oldest civilizations in the world, their accounting system lacked structure. China went from a double-entry accounting system, to a debit-credit accounting system following Western Civilization, to other individual systems that certain leaders felt would be more specific to China.
To remain competitive with other foreign accounting industries, China developed groups of accounting professionals to research and develop accounting standards. The Chinese Ministry of Finance was developed to establish regulations and standards for their current accounting system. Under the Ministry of Finance, the Administration of Accounting Affairs was implemented to assist China in conforming to a uniform accounting system. Along with these two standard setting bodies, China also followed the United States in developing the Chinese Institute of Certified Public Accountants. Compared with the United States, China has gone through... [continues]
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