1 / 17

People’s Republic of CHINA

People’s Republic of CHINA. Ardilla Hasni Fella Distiara M nur Fiqri Wicaksono Ahmad Kamil. Profile. Background. B ackground. Background. Companies in China issue four categories of shares “A” shares, which can be owned only by Chinese citizens, and are traded on two stock exchange

nerice
Download Presentation

People’s Republic of CHINA

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. People’s Republic of CHINA ArdillaHasni FellaDistiara M nurFiqriWicaksono Ahmad Kamil

  2. Profile

  3. Background

  4. Background

  5. Background Companies in China issue four categories of shares • “A” shares, which can be owned only by Chinese citizens, and are traded on two stock exchange • “B” shares, which can be owned by foreigners • “C” shares, which are nontradable and held mainly by government and other SOEs • “H” shares, which can be owned only by foreigners and are traded in Hongkong

  6. History of Accounting Profession

  7. The competition between accountants and auditors with their own rules issued by different government department was confusing, particulary to international accounting firm. Consequently, steps were taken to merge the CICPA and CACPA. In 1993, the CPA Regulations were upgraded to become CPS law. As the result, the MoF was given the authority to regulate both the accounting and auditing firms. The CICPA became a member of the IASC in 1997. The merger between the CICPA ang the CACPA was completed in1998.

  8. The practice of ‘Hooking Up” The practice of hooking up refers to an affiliate relationship between an accounting/auditing firm and its sponsoring organization, normally a government body. Guanxi Guanxirefers to connection or tight, close-knit networks. It can be considered an important feature of Chinese business culture.

  9. Accounting Regulation • The government continues to act as the accounting regulator in order to retain political control • The Accounting Law was amended in 1993 and 1999, and covers all enterprises and organizations including those not owned or controlled by the state • In 1992 the Ministry of Finance issued Accounting Standards for Business Enterprises (ASBE), a conceptual framework designed to guide the development of new accounting

  10. Harmonizing Chinese accounting to international practices serves to remove barriers of communication with foreign investors and helps meet the needs of the economic reforms already under way • The China Accounting Standards Committee (CASC) was established in 1998 as the authoritative body within the Ministry of Finance responsible for developing accounting standards • The China Accounting Standards Committee (CASC) was established in 1998 as the authoritative body within the Ministry of Finance responsible for developing accounting standards

  11. Accounting Principles and Practies The ASBE defines fundamental principles (going concern, accounting period, substance over form, consistency, timeliness, understandability, accrual basis, matching, impairment recognition, materiality, and measurement currency vs. presentation currency) and financial statement (assets, liabilities, owner’s equity, revenues, expenses, and profits), which are similar to those found in IFRS. It also specifies the contents of financial reports minimum notes to the financial statement, and how soon after the end of the accounting period reports should be published.

  12. The ASBE also includes: • Classification within assets, liability, and equity elements, as well as recognition and measurement principles for a wide variety of assets and liabilities. • Revenue recognition principles for goods, services, royalties, and interest. • Expense recognition principles for bad debts, cost of goods sold, depreciation, major overheads, and impairment of assets. • Accounting principles for nonmonetary transactions, assets contributed by investors, and accounting for income taxes. • Principles for consolidated financial statement and accounting for investment in joint ventures.

  13. The unique features in the Chinese environment include the following: • Civil litigation is very rare and thus CSRC is the prime discipliner of firms and their managements. • In the ownership structure of listed firms, block holders are usually the sate and quasi-state institution such as SOEs. • The dynamics in Chinese boardrooms are likely to be different from those of their counterparts in Anglo-American countries. • Auditing profession in China is relatively new and it has faced a steep learning curve. • State ownership still has an important influence on the organization and development of accounting standards. • Wholly foreign-owned multinational corporations competing against weaker and smaller domestic firms are becoming a major concern. • Chinese regulators view harmonization between Chinese GAAP and IFRS as a two-way process that should permit differences and local innovation. • The capital market in China is controlled by government.

  14. THANKYOU

More Related