It's been four years since the mainland began formally adopting a significant number of accounting standards laid out by the International Accounting Standards Board (IASB). In 2007, a process of convergence began, with Chinese accounting standards largely being replaced with standards more in keeping with international financial reporting standards (IFRS) in an attempt to bring the mainland more in line with the rest of the world.
Rather than gradually phasing in the new standards, the mainland chose to adopt the main standards in bulk, tailoring them to their needs and translating the relevant points of IFRS into the Chinese accounting standards system.
The decision to bring the nation's accounting standards, largely in line with global norms, was seen as further evidence of the government's determination to internationalise its economy and business practices.
'China has come a long way in a short time,' says Clement Chan, managing partner at BDO. 'The rate of change really has been remarkable.'
Reflecting the continuing development and reform throughout China, changes to accounting standards have brought the mainland closer to being on a level playing field with the rest of the world. Instead of the Hong Kong method of adopting IFRS in word-for-word translations, the mainland's approach has been to shape individual standards based on the relevant IFRS principles.
'I think it's been the absolute right approach,' says Yvonne Kam, a partner at PricewaterhouseCoopers in Shanghai, who believes clarity has improved in translation. 'The English language standards can sometimes be long and convoluted - it's been much more straightforward in Chinese.'
But to non-Chinese speakers and readers, publishing the guidance and updates only in Chinese leaves a barrier to accessibility. 'Not adopting IFRS word for word makes sense for the moment for China, but greater transparency would help persuade the wider world to accept that the Chinese standards really are converged,' says Catherine Morley, a professional practice partner at KPMG.
