Political Influence and Coexistence of a Uniform Accounting System and Accounting Standards: Recent Developments in China

26 Pages Posted: 16 Jun 2004

See all articles by Jason Zezhong Xiao

Jason Zezhong Xiao

Cardiff Business School, Cardiff University

Pauline Weetman

University of Strathclyde - Department of Accounting and Finance

Manli Sun

Renmin University of China

Abstract

This article investigates the role of political influence, as well as accounting tradition and the equity market, in China's recent changes in accounting regulation. We find that the Chinese government, in part self-motivated and in part under external pressure, has been active in developing accounting standards in harmony with international accounting standards. However, it has retained a uniform accounting system in the Enterprise Accounting System issued in 2000 to accommodate the special circumstances of a transforming government, strong state-ownership, a weak accounting profession, a weak and imperfect equity market, and the inertial effect of accounting tradition and cultural factors. This article also contributes to existing models of accounting system classification by illustrating the need for considering political influence as a factor that affects the rate of transition towards full implementation of international accounting standards.

JEL Classification: G38, M41, M44, M47

Suggested Citation

Xiao, Jason Zezhong and Weetman, Pauline and Sun, Manli, Political Influence and Coexistence of a Uniform Accounting System and Accounting Standards: Recent Developments in China. Abacus, Vol. 40, No. 2, pp. 193-218, June 2004. Available at SSRN: https://ssrn.com/abstract=554921

Jason Zezhong Xiao (Contact Author)

Cardiff Business School, Cardiff University ( email )

Aberconway building
Colum Drive
Cardiff, CF10 3EU
United Kingdom

Pauline Weetman

University of Strathclyde - Department of Accounting and Finance ( email )

Curran Building
100 Cathedral Street
Glasgow G4 0LN
United Kingdom
+44 (0)141 548 2944 (Phone)
+44 (0)141 552 3547 (Fax)

Manli Sun

Renmin University of China

Room B906
Xianjin Building
Beijing, Beijing
China

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