Preparing China Financial Statements

Preparing China Financial Statements

Financial statements are accounting statements that reflect the status of an enterprise’s funds and profits for a certain period of time. The types, formats, and presentation requirements of financial statements in China are prescribed by a unified accounting system, which requires enterprises to prepare them on a regular basis.

Through the income statement, cash flow statement, balance sheet, and statement of changes in owner’s equity, financial statements reflect the operating results and other gains and losses of an enterprise; the sources and destination of cash flows; the status of assets and financing structure, as well as the composition of owner’s equity in a comprehensive manner. Including the prospectus or the annual report of the enterprise, they are the core content of the financial report or public information disclosure.

The regulations on financial accounting reports of Chinese enterprises are formulated in accordance with the Accounting Law of the People’s Republic of China, stating that certified public accountants and accounting firms shall audit the financial accounting reports of enterprises in accordance with the relevant laws and administrative regulations and the professional rules of certified public accountants, and shall be responsible for the audit reports.

 

Precautions for Preparing Financial Statements in China

Before preparing financial statements, an enterprise should conduct a thorough assets ascertainment and verify its debts, as well as complete the following tasks.

1. Verify that the contents and amounts of each accounting book record are consistent with those of the accounting vouchers and that the direction of recording matches.
2. Closing the books in accordance with the closing date, closing the balances and occurrences of the relevant accounting books, and reconciling the balances between the accounting books.
3. To check whether the relevant accounting is carried out in accordance with the provisions of the national unified accounting system.
4. For transactions and events for which there is no uniform accounting method in the national accounting system, check whether they are carried out in accordance with the general principles of accounting.
5. Check whether there are accounting errors, or require adjustment of relevant items in the prior or current period based on changes in accounting policies.

 

 

Do You Need Dedicated Assistance To Prepare Audited China Financial Statements?

3E Accounting provides a full range of accounting services, in addition to drafting unaudited financial reports as well as conducting audits through affiliated audit firms. Contact us to learn more about our services for preparing China financial statements!