China’s Development of Accounting Practices During Economic Reform

Since economic reform, accounting practices have progressively moved from accountability to governments and control over economic activities to various forms of economic entities. The development of Chinese accounting practices is to serve enterprises and the market, which are the micro organs of the national economy. This paper reviews the economic reform in the Mainland, and the reform of Chinese enterprises, legal environment, foreign direct investment and securities markets which have been contributing to the development of accounting practices. It also suggests that the Chinese Government should advance the new accounting standards to all business enterprises in order to ensure consistency. The continuous economic reform will certainly elevate industrial accounting, which calls for more stringent corporate governance to reduce corporate frauds.