ABSTRACT
This chapter discusses government authorities intended to exercise overall control of all economic and business activities under a centralized planned economy. All accounting regulations and standards in China must be formulated by government authorities instead of by the accounting profession. The Chinese government has established a legal framework to exercise rigid control over accounting affairs throughout the country. Traditionally, accounting practices in China were governed by mandatory accounting regulations formulated by the Ministry of Finance and a number of other ministerial authorities of the central government. Accounting personnel who possess relatively broad accounting knowledge and substantial work experience in accounting and financing assignments will be graded as ‘accountant’. The general rules on business financing will, however, lose their relevance when China’s business legal system is in full operation. Up to the end of 1996, the Chinese government had enacted or redrawn a series of business legislation, including the company law and new taxation laws.
