Perspectives on Accounting and Finance in China, and: Auditing Standards of the People's Republic of China, and: Financial Reform in China (review)

Reviews 347 John Blake and Simon Gao, editors. Perspectives on Accountingand Finance in China. London and New York: Roiitledge, 1995. xv, 382 pp. Hardcover, isbn 0^415-11812-3. Howard Gensler. Auditing Standards ofthe People's Republic ofChina. Hong Kong: FT Law and Tax Asia Pacific, 1996. v, 151 pp. Paperback, isbn 962-661-011-5. On Kit Tarn, editor. Financial Reform in China. New York and London: Routledge, 1995. xiii, 195 pp. Hardcover $65.00, isbn 0-415-01971-0. Perspectives on Accounting and Finance in China by John Blake and Simon Gao consists ofnineteen different research papers by forty experts in the areas of accounting and finance. This book is quite comprehensive, each paper discussing different topics in the accounting system and securities markets in China. Taken together, the essays comprise a useful handbook to illustrate the history and development ofthese systems. This book is divided into four major parts. It begins by examining aspects of the business and financial structure ofChina such as the stock market, legislation, and investment opportunities. Second, it investigates accounting regulations and standards that are reemerging in China. A comparison is made between Chinese and international accounting standards. Third, it outiines the developments in accounting practices by focusing on the computerization of accounting, research in accounting, and accounting reforms. Finally, it discusses developments in the accounting profession. A detailed analysis is provided ofthe CPA exam in China and problems in accounting education, and the auditing systems in China and the United Kingdom are compared. The book offers a good picture ofthe developments in accounting and the securities markets in China since the early 1980s. It provides sufficient background information to review the history ofthese developments. For example, chapter 2 offers an overview ofthe traditional accounting system and goes through the three main phases in the current reform ofthe Chinese accounting system. Chapter 5 presents a background history on the development of Chinese securities markets and compares securities markets in China and the West. Readers will thus come away with a good understanding of these subjects.© 1997 by UniversityThe content ofthe book does not exactìy match its tide. The editors put ofHawai'i Pressmuch more emphasis on the accounting system, with only part 2 covering finance . Although most of the authors identify the issues facing China today, they fail to provide solutions or suggestions. Furthermore, because ofthe rapidity with 348 China Review International: Vol. 4, No. 2, Fall 1997 which China's accounting and financial systems are evolving, readers are advised to check sources that are more up-to-date. All in all, this is a comprehensive and well-organized volume useful for anyone who is interested in accounting and finance in China. Auditing Standards of the People's Republic ofChina describes the emerging Chinese auditing practices, including die history ofwhy, when, and how the Chinese government recently established the new official auditing standards. There are three levels of standards: (1) the Principal Auditing Standard, (2) Specific Auditing Standards and Practice Statements, and (3) Professional Guidelines. The promulgation of these standards is an important constituent of the new round of Chinese accounting reforms. Presented in both English and Chinese are the first group of standards, promulgated in December 1995 by the Ministry of Finance of the People's Republic of China. The "Principal Auditing Standard" comprises the "Specific Auditing Statements" No. 1, Audit of Financial Statements; No. 2, Audit Engagement Letters ; No. 3, Audit Planning; No. 4, Audit Sampling; No. 5, Audit Evidence; No. 6, Audit Working Papers; and No. 7, Audit Reports; and "Auditing Practice Statement " No. 1, Capital Verification. This book has a number of strengths. It explains the process through which the current standards were developed. It is very useful for an understanding ofwhere China has come from and where it is today, and it is a good source for non-Chinese readers who need an English version of Chinese auditing standards. Also, the fact that these standards are presented in both English and Chinese ensures that one can read in the original language without fear of missing something through translation. All in all, the text is easy to understand and is well organized. One weakness is the confusion over...