The Comparative Analysis of Financial Reporting Between China and the UK
The Comparative Analysis of Financial Reporting Between China and the UK
Introduction
As commonly acknowledged, accounting, as a social science, a language of economy, is affected by the environment in which it stays; In the meantime, it also brings impact on this environment (Černe 2009). There are numerous factors that affect the accounting system of a country, such as culture, politics and economy and other non-accounting factors (Nobes & Parker 2010).
China is one of the most populous countries in the world, and it has maintained a rapidly growing economy since 1990s. In the meantime, UK is a typical capitalist country, which joined European Union on 1st January 1973, and its GDP is mostly created by services. In this report, a comparative analysis of financial reporting between UK and China will be demonstrated.
This article aims at analyzing accounting system of China by enumerating key influential factors, which will be discussed and compared with that of UK. Then, the analysis of regulatory framework of China will be illustrated. After that, a conclusion will be given to summarize the differences or similarities of financial reporting and accounting rules and methods prescribed by law or standard.
Business Environment
Socio-culture
Culture plays a critical role in the development of accounting.
According to the Hofstede 's (1984) four cultural dimension, China is a highly collectivist culture where collective interests always have the higher priority than those of individuals. The development of Chinese accounting system is dominated by the Chinese government, and the accounting information was collected for government needs.
Chinese society is a large power distance society, and the degree of centralization is very high. it has a rigid social hierarchy, and the state takes a top-down approach, the Chinese accounting standards was mainly established by the Ministry of Finance of the government, and influence on the development of
Introduction
As commonly acknowledged, accounting, as a social science, a language of economy, is affected by the environment in which it stays; In the meantime, it also brings impact on this environment (Černe 2009). There are numerous factors that affect the accounting system of a country, such as culture, politics and economy and other non-accounting factors (Nobes & Parker 2010).
China is one of the most populous countries in the world, and it has maintained a rapidly growing economy since 1990s. In the meantime, UK is a typical capitalist country, which joined European Union on 1st January 1973, and its GDP is mostly created by services. In this report, a comparative analysis of financial reporting between UK and China will be demonstrated.
This article aims at analyzing accounting system of China by enumerating key influential factors, which will be discussed and compared with that of UK. Then, the analysis of regulatory framework of China will be illustrated. After that, a conclusion will be given to summarize the differences or similarities of financial reporting and accounting rules and methods prescribed by law or standard.
Business Environment
Socio-culture
Culture plays a critical role in the development of accounting.
According to the Hofstede 's (1984) four cultural dimension, China is a highly collectivist culture where collective interests always have the higher priority than those of individuals. The development of Chinese accounting system is dominated by the Chinese government, and the accounting information was collected for government needs.
Chinese society is a large power distance society, and the degree of centralization is very high. it has a rigid social hierarchy, and the state takes a top-down approach, the Chinese accounting standards was mainly established by the Ministry of Finance of the government, and influence on the development of
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