What are the main differences between PRC GAAP, IFRS and US GAAP?⑵

Topic PRC GAAP(New Accounting Standard for Enterprises issued by Ministry of Finance of P.R.C on Feb.15, 2006) IAS/IFRS US GAAP Inventory Use of LIFO to calculate inventory delivery cost is prohibited. Inventory provisions confirmed in earlier stage can be reversed back when the price rises in the later stage. – Use of LIFO permitted. Reversal of […]

What are the main differences between PRC GAAP, IFRS and US GAAP?⑴

Topic PRC GAAP(New Accounting Standard for Enterprises issued by Ministry of Finance of P.R.C on Feb.15, 2006) IAS/IFRS US GAAP General approach Principle-based standards accompanied by detailed application guidance. Principle-based standards with limited application guidance. Same as IFRS Ability to make accounting choice Few choices. Some accounting choices allowed. Same as IFRS Financial year end date […]

What is US GAAP?

US GAAP represents a set of accounting rules used to prepare financial statements for publicly traded companies and many private companies in the United States. In order to administer the sophisticated capital market over the past one hundred years, US GAAP has been developed to one of the most comprehensive GAAPs in the world and […]

What is IFRS?

International Financial Reporting Standards (“IFRS”), often known the original International Accounting Standards (“IAS”), are a set of accounting standards. They are issued by the International Accounting Standards Board (“IASB”), an independent, international organization supported by the professional accountancy bodies. The objective is to achieve uniformity and transparency in the accounting principles that are used by […]

What is PRC GAAP?

Generally accepted accounting principles (“GAAP”) of the People’s Republic of China (“PRC”) come from a number of sources, majority of which represent the laws and regulations issued by the Ministry of Finance (“MOF”), and, listed company disclosures issued by the China Securities Regulatory Commission (“CSRC”).

What should I do before the auditors arrive?

Conducting a sound internal review prior to your annual audit will improve the efficiency of your audit and save both you and your auditors’ valuable time. a) Make sure your bank reconciliations are completed for all bank accounts. b) There should be no significant discrepancies in your petty cash c) Conduct a complete check of accounts receivables and […]

How can I find a good audit firm in China?

Most small to medium size FIEs prefer to their accounts being audited by an accounting firm with international standards expertise with a reasonable fee. In addition, in view of the complexity of China tax regulations, foreign investors should keep themselves being updated with any new rules and the modifications to existing regulations. Your auditor should […]

Is annual audit required by law?

Yes. Under current legislation, all Foreign Invested Enterprises (“FIE”) such as Wholly Foreign Owned Enterprises (“WFOE”), Joint Ventures (“JV”), and Representative Offices (“RO”), are required to be audited on an annual basis. This statutory requirement has to be met prior to business license renewal every year. The deadline for the filing of annual audits is […]

What are the differences between audit opinions?

The audit opinion is part of the auditor’s report expressing an opinion on the extent to which the financial statements are materially misstated. The fact that it is an opinion, instead of a certification, is meant to inform financial statement users that the auditor is providing reasonable assurance, rather than a complete assurance, as to […]

What contents should be included in an audit report in China?

a) Auditor’s opinion b) Audited financial statements(balance sheet, income statement, cash flow statement, profit distribution statement, employee insurance details, tax payment details and foreign exchange statement) c) Explanation to each item on the audit report