Enforcement of China's Accounting Standards: Reflections on Systemic Problems
AbstractThe key objective of this paper is to highlight the interconnectedness between Chinas political and economic system and its weak enforcement of accounting and auditing standards. The institutional analysis shows that the prevailing political and economic priorities constituting Chinas socialist market economy create a framework, that basically relies on state-led enforcement with weak supplementary private safeguard mechanisms. The resulting policy-mix is characterized by a mismatch of incentives and available devices to effectively enhance enforcement. While the state bureaucracy has little incentive to effectively fight financial misreporting because of both blurred policyeconomy boundaries and the coexistence of multiple and even non-economic goals, shareholders and creditors do not have sufficient and effective private safeguard mechanisms at hand. Findings lead to the conclusion that Chinas recent harmonization move of accounting and auditing standards urgently needs to be backed up by stronger efforts to create effective enforcement mechanisms. Sound reforms would have to center on a rigorous upgrading and restructuring of the responsible bodies supervising auditing quality and financial disclosure. Parallel to these measures, the increasing integration into the global economy may provide incentives and competitive pressure to comply with globally accepted standards.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Bibliographic InfoArticle provided by De Gruyter in its journal Business and Politics.
Volume (Year): 5 (2003)
Issue (Month): 2 (December)
Contact details of provider:
Web page: http://www.degruyter.com
You can help add them by filling out this form.
reading list or among the top items on IDEAS.Access and download statisticsgeneral information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Peter Golla).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.