Legal and Accounting Environment


Legal

A formal legal system has existed in Mainland China since the establishment of the PRC in 1949; there are four levels of people's courts: local, intermediate, high and the Supreme Court as well as those for maritime and military issues.

Accounting

The Chinese Institute of Certified Public Accountants (www.cicpa.org.cn) is the the governing body of the accounting profession in China and is controlled and administered by the Ministry of Finance. After the opening up of China’s markets to foreign investment accounting laws and regulations have been formulated for foreign invested enterprises.

On 1 January 2007 the Accounting Standards and CPA Auditing Standard took effect.

The 38 Accounting Standards became effective for listing companies as at 1 January 2007, and all other types of enterprises were encouraged to follow the Accounting Standards.

The 48 Auditing Standards became effective as at 1 January 2007.