China will accelerate improvements to its accounting standards and policies next year to keep abreast with economic growth and the expectations of the international business world.
“We plan to promulgate 20-plus accounting standards next year,'' said Liu Yuting, head of accounting department under the Ministry of Finance at Tuesday's CFO Rising Conference in Shanghai.
He said China's accounting system has completed its reforms in line with market economies from planned-economy-based practices.
With two laws and two regulations governing accounting practices now on the books, a framework aligning China's accounting and reporting practices with global standards has been established, he said.
To demonstrate the State's commitment to applying the new system, the central government ordered that all 189 State-owned enterprises (SOEs) directly under the central government adopt the new accounting system by 2005, following joint-stock and foreign-invested enterprises.
He expects that the new system will be applied by more than 100 such SOEs next year.
“The application of new accounting system will take place simultaneously with the SOE reforms,'' he added.
Meanwhile, he pointed out the pool of sophisticated financial managers and accountants in China is still relatively small compared with its economic development.
He told more than 300 finance managers attending the conference that accountants should not regard accountancy from simply an “accountant's point of view.''
Instead, they should improve their professional judgment, attach more importance on inner controls and financial management.
Chief financial officers should also watch closely on the latest policies and macroeocnomic trends and understand the implication of these trends.
“Accountancy is closely related to management, business operations and State economic reforms,'' he said.
The conference is organized by CFO China magazine, a Chinese-language publication under the UK-based Economist Group.