Friday, May 4, 2012

Chinese accounting reform: Towards a principles-based global regime

The Institute of Chartered Accountants of Scotland (ICAS) has long advocated the benefits of principles-based accounting standards. The success of such standards relies on the ability of accountants to make "good quality" judgments, but to those new to the profession or new to principles-based standards, making judgments can be difficult.

The need for appropriate guidance to help those making judgments and the need to develop a professional judgment framework became evident from earlier ICAS projects on principles-based accounting standards, particularly while undertaking interviews for the report Chineseaccounting reform: Towards a principles-based global regime (also available in Chinese). The report provides insight into China’s adoption of IFRS-based standards and broadens the principles versus rules debate beyond Canada, Europe and the United States.


The main objectives of the research project were: (1) to identify and highlight the achievements in the implementation of IFRS principles-based standards in China; (2) to identify and consider the issues to be addressed in the implementation of principles-based standards, with a focus on the experience in China; and (3) to assess the degree of support for principles-based standards in China, in order to influence the future development of IFRS. This 32-page report, published in June 2010, is available on the ICAS website, along with other pertinent financial reporting guidance publications.