ABSTRACT
The reform changes the Chinese accounting model dramatically in order to accommodate the demands for accounting work suitable to the growth of a market-based economy, or the so called ‘socialist market economy’. In China, the term ‘accounting system’ has long been used to represent government regulations on accounting work, or a set of regulatory rules governing accounting recognition, measurement, recording and reporting. Accounting standards provide general guidance for accounting practice. They are the basic guidelines or standards for accounting and financial reporting. The official implementation of Accounting Standards for Business Enterprises is a cornerstone in Chinese accounting reform because Accounting Standards for Business Enterprises lays the foundation for the conformation of Chinese accounting and financial reporting to world standards. In the conceptual framework of accounting and reporting in western countries, a series of constraints relating to accounting and financial reporting is clearly identified.
