Accounting Reporting Criteria
Transcript of Accounting Reporting Criteria
1. Regulatory Environment
2. Foreign currency
3. GAAP
WWTC
Product Safety
International Laws and Regulations
China Regulations
International Trade
Buying products
cheap oversee and
selling ,for big profit
in the United States
Make my money clean
People’s Republic of China
General Accepted Accounting
Principles
-Rooted in Chinese Accounting
Law (the highest authority in
Chinese accounting)
-Ministry of Finance
-Moving toward international IFRS
principles
General
Accepted
Accounting
Principles
accommodates variation in
applied accounting methods
as long as the methods
generally adhere to a set of
principles
The Hartcourt Companies
Inc. is a Chinese distributor
of computer hardware and
peripherals made by
Samsung Electronics, including
computer display,
monitors, notebook
computers, and
other digital devices.
U.S.
GAAP framework
Of accounting
standards
Dell, Inc. engages in the
design, development, manufac
ture, marketing, sale, and
support of computer systems
-Remarkable growth in economy since 1979
-New accounting system based on International Accounting Standards
-PRC GAAP accounting standards rooted in Chinese accounting Law
-Role of Minister of Finance
-Reporting
-Economy Change
Both use principle-based standards accompanied by detailed
application guidance
Both use the historical cost of property, plant, and equipment on
the balance sheet
PRC GAAP does not recognize items that do not satisfy the
definition of an asset, liability, or equity on the balance sheet.
Differences in tax rules
Cultural differences that impact accounting reporting
The quality of financial statements, infrastructure and business processes will
be lower than that to which Western investors are accustomed. In
addition, they frequently contain errors which first need to be corrected.
Low level of transparency in financial information
Audited financial statements are typically not reliable from a U.S. GAAP
perspective
Extent of related-party transactions is usually extensive and inadequately
disclosed (American public companies are required to disclose all
transactions with related parties such as executives, associates and their
family members in their annual 10-K report)
Disclosure of contingent liabilities rarely disclosed
~Haagmans, S.(2006)~
1. Regulatory Environment
2. Foreign currency
3. GAAP
Haagmans, S. (2006) Due Diligence Factors of success in China. Retrieved July 6, 2008, from Web site: http://www.eycom.ch/publications/items/china/aabs_due_diligence factors/en.pdf
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