Accounting Services in China

Accounting Services in China Accounting system in China is based on Accounting Act in China. Financial Reporting Regulations for Companies and Accounting Standards for Companies regulate the accounting system of China. In addition, the Accounting Standards is divided into Old Standards and New Standards.

Under the Financial Standards, there is Accounting System of Company, Accounting system of Financial Companies and Accounting system of Smallscale companies.

It is the basic law in China and there are some points should be paid attention to understand.

Old China Accounting Standards (CAS) is made up of basic standards and concrete standards. Basic standards are the items about the preparation of financial reports and concrete standards are the contents about accounting process in details based on the basic standards.

New Accounting Standards is promulgated in 2006. And it is based on China financial standards but it is also a convergence to IFRS. Therefore, China financial standards and IFRS will have an influence with each other.

It should be focused on that companies could not use both old standards and new standards. Almost all of listed companies, large-scale national companies and some large-scale companies are forced to use new accounting standards, but other companies are recommended to use.

Accounting period: January 1st to December 31st Monthly financial reports: It is required to submit monthly financial reports to Taxation office within 15 days from the end of month. Season financial reports and temporary tax payment are required to submit on 15thof next month. Within 45 days from the end of year, it is necessary to submit the closing financial reports and tax declaration and then it is required to do tax payment.

Financial statements: The tax declaration of foreign investment companies is from the end of March to May 31st and common annual review of financial statements is from March 1st to June 30th.

Keeping of books: Preparing of books:     

Accounting system in China Accounting period is from January 1st to December 31st. It cannot be designated.

Financial report should be showed by RMB. Financial report should be prepared in Chinese. (It is possible to use one foreign language together with Chinese.)

It is necessary to do internal governance and legally audit to some kinds of enterprises.

Old and New Standards Accounting period and deadline of financial reports Accounting Books Yearly financial statements: permanent Accounting books and receipts: 15 years Fixed assets book: 5 years Monthly financial reports: 3 years Cashier of companies cannot hold the additional post such as the check of materials and management. So that the number of accountant for companies is required at least two generally.

The work of accountant can be outsourced but the management of cash should be done inside of company. So that at least one cashier is needed in the company.

Accountant in China must be a certified accountant before assuming as an accountant.

If the cashier of company cannot work one day, the procedure in bank cannot be conducted this day. Because the resident card of registrar should be showed in order to withdraw the cash from bank. Therefore, it is very important to registrar another ‘name except cashier advance.

According to Accounting Act, the duty of accepting legally audit for some kinds of enterprises is regulated. Government will check the completion of

accounting materials, the correctness of contents, the conditions of accountants and so on.

If an illegality in accounting is founded by someone or government, there will be fine and plenty for companies.