Laws of the People's Republic of China

(Adopted at the Ninth Meeting of the Standing Committee of the Sixth National People's Congress and promulgated by Order No. 21 of the President of the People's Republic of China on January 21, 1985, and effective as of May 1, 1985)

CONTENTS

CHAPTER I GENERAL PROVISIONS

CHAPTER II ACCOUNTING PRACTICE

CHAPTER III ACCOUNTING SUPERVISION

CHAPTER IV ACCOUNTING OFFICES AND ACCOUNTING PERSONNEL

CHAPTER V LEGAL LIABILITY

CHAPTER VI SUPPLEMENTARY PROVISIONS

CHAPTER I GENERAL PROVISIONS

   Article 1. This Law is formulated in order to improve accounting work, to ensure that accounting personnel exercise their functions and powers according to law and to bring into play the role of accounting in upholding the state systems of public finance administration and financial management, protecting socialist public property, strengthening economic management and raising economic results.

   Article 2. State enterprises and institutions, government agencies, public organizations and armed forces shall abide by this Law in handling accounting affairs.

   Article 3. Accounting offices and accounting personnel must abide by laws and regulations, and handle accounting affairs, conduct accounting computation and control and exercise accounting supervision in accordance with the stipulations of this Law.

   Article 4. Administrative heads of all localities, departments and units shall direct their accounting offices, accounting personnel and other personnel in implementing this Law and shall ensure that the functions and powers of accounting personnel are not infringed upon. No one is allowed to attack or retaliate against accounting personnel.

Moral encouragement and material awards shall be given to the accounting personnel who have made outstanding achievements in conscientiously implementing this Law and who are devoted to their duty.

   Article 5. The department of finance under the State Council shall administer the accounting work throughout the country.

The departments of finance under the local people's governments at various levels shall administer the accounting work of their respective areas.

   Article 6. A uniform accounting system of the state shall be formulated by the department of finance under the State Council in accordance with this Law.

The departments of finance under the people's governments of the provinces, autonomous regions, and municipalities directly under the Central Government, the competent departments of the State Council and the General Logistics Department of the Chinese People's Liberation Army may, on condition that this Law and the uniform accounting system of the state are not contravened, formulate accounting systems or supplemental stipulations for their respective areas and departments and submit them to the department of finance under the State Council for examination and approval or for the record.

CHAPTER II ACCOUNTING PRACTICE

   Article 7. Accounting procedures shall be undertaken and accounting conducted with respect to the following transactions:

(1) receipts and disbursements of cash holdings and valuable securities;

(2) receipts, issuances, additions, reductions and use of money and articles of property;

(3) creation and settlement of debts and claims;

(4) increases and decreases of funds, receipts and outlays of appropriations;

(5) computation of revenue, expenses and costs;

(6) computation and treatment of financial results; and

(7) other transactions that are subject to accounting procedures and to accounting.

   Article 8. The fiscal year shall start on January 1 and end on December 31 on the Gregorian calendar.

   Article 9. Account books shall be kept, using Renminbi yuan as the unit.

Transactions in foreign currency shall be converted into Renminbi in bookkeeping, and the conversion rate used, as well as the amounts in foreign currency, shall be recorded concurrently.

   Article 10. Accounting documents, account books, accounting statements and other accounting information shall be authentic, accurate and complete and shall conform to the provisions of the accounting system.

   Article 11. In handling the transactions specified in Article 7 of this Law, original documents must be drawn up or obtained, and then promptly filed with the accounting office.

Accounting offices must examine the original documents and prepare accounting vouchers based on the original documents examined.

   Article 12. Each unit shall set up its accounting items and account books in accordance with the provisions of the accounting system.

Accounting offices shall keep their books on the basis of the examined original documents and accounting vouchers in accordance with the bookkeeping rules stipulated by the accounting system.

   Article 13. Each unit shall set up a property inventory system and ensure that the accounting records conform to the physical assets and cash holdings.

   Article 14. Each unit shall prepare its accounting statements on the basis of the accounting records and in accordance with the provisions of the uniform accounting system of the state. The accounting statements shall be reported to the superior competent authorities for compilation and submission to the department of finance and other relevant departments.

Accounting statements shall be signed or sealed by the unit's administrative head, the person in charge of the accounting office and the accountant in charge. If the unit has an accountant general, he shall also sign or seal the accounting statements.

   Article 15. Archives shall be established for accounting documents, account books, accounting statements and other accounting information in accordance with the relevant state provisions, and shall be properly retained. The period of retention of the archives and the procedures for their destruction shall be stipulated jointly by the department of finance under the State Council and the relevant departments.

CHAPTER III ACCOUNTING SUPERVISION

   Article 16. The accounting office and accounting personnel of a unit shall exercise accounting supervision over the unit.

   Article 17. Accounting offices and accounting personnel shall not accept any original documents that are inauthentic or illegitimate. Original documents which are inaccurately and incompletely recorded shall be returned for correction or supplementation.

   Article 18. When an accounting office and accounting personnel find that the accounting records do not conform to the physical assets and cash holdings, they shall deal with the issue in accordance with relevant stipulations. If they have no authority to handle the case by themselves, they shall report immediately to the administrative head of their unit requesting an investigation and a settlement of the issue.

   Article 19. An accounting office and accounting personnel shall not handle any receipts or disbursements that violate the stipulations of the state uniform system of public finance administration and system of financial management.

In cases where an accounting office and accounting personnel believe that certain receipts and disbursements are in violation of the state uniform system of public finance administration and financial management, and where the unit's administrative head insists on their being handled, the said accounting office and personnel may carry out the decision made by the administrative head, at the same time making a written report to the head of the superior administrative unit requesting for action, and also to the auditing agency. The head of the superior administrative unit must make a decision on the matter within one month from the date of receiving the written report from an accounting office or accounting personnel. Accounting personnel shall also be held liable if they do not submit a report to the head of the superior administrative unit.

   Article 20. All units must accept supervision exercised in accordance with laws and relevant state regulations by auditing agencies, departments of finance and tax agencies and must provide them with accounting documents, account books, accounting statements, other accounting information and relevant data. They may not conceal, falsify or refuse to provide such material and information.

Public accountants' offices composed of certified public accountants approved by the department of finance under the State Council or the departments of finance under the people's governments of the provinces, autonomous regions, and municipalities directly under the Central Government may undertake to audit accounts pursuant to the relevant state provisions.

CHAPTER IV ACCOUNTING OFFICES AND ACCOUNTING PERSONNEL

   Article 21. According to the needs of its accounting work, each unit shall set up an accounting office or staff a relevant office with accounting personnel and designate an accountant in charge. Large and medium-sized enterprises, institutions and competent departments may have accountants-general. The position of an accountant-general shall be assumed by a person with the technical title of accountant or above.

Accounting offices shall establish an internal auditing system.

A cashier shall not be concurrently in charge of auditing, taking custody of accounting archives or keeping the revenue, expense or claims and liability accounts.

   Article 22. The main functions of accounting offices and accounting personnel shall be:

(1) to conduct accounting practice pursuant to the provisions of CHAPTER Two of this Law;

(2) to exercise accounting supervision pursuant to the provisions of CHAPTER Three of this Law;

(3) to formulate specific procedures for handling accounting affairs in their respective units;

(4) to participate in the formulation of economic and business plans, and examine and analyse the results of the execution of budget and financial plans; and

(5) to handle other accounting affairs.

   Article 23. Accounting personnel shall be appointed or removed in accordance with the provisions for the limits of authority over personnel administration. The appointment and removal of the persons in charge of accounting offices and the accountants in charge in enterprises or institutions shall be approved by their superior administrative units. If an accountant who is loyal to his duty and adheres to principles is wrongly treated, the superior administrative unit shall instruct the unit in which he works to correct the mistake. If an accountant proves himself unsuitable for accounting work because of dereliction of duty and abandonment of principle, the superior administrative unit shall instruct the unit in which he works to replace him.

   Article 24. Accounting personnel who are being transferred to other work or leaving their posts must finalize the handing-over procedure with the persons who are taking over.

The person in charge of the accounting office and the accountant in charge shall supervise handing-over procedures for ordinary accountants. The administrative head of a unit shall supervise handing-over procedures between the person in charge of the accounting office and the accountant in charge; when necessary, the superior administrative unit may send people to participate in the supervision of the hand-over.

CHAPTER V LEGAL LIABILITY

   Article 25. Administrative sanctions shall be taken against administrative heads of those units and accounting personnel who have seriously violated the provisions for accounting practice specified in CHAPTER Two of this Law.

   Article 26. Administrative sanctions shall be taken against administrative heads of units, accounting personnel and other personnel who have counterfeited, concocted or deliberately destroyed accounting vouchers or account books. When the circumstances are serious, criminal liability shall be investigated in accordance with the Law.

   Article 27. Administrative sanctions shall be taken against those accounting personnel who have accepted original vouchers that they clearly know to be inauthentic or illegitimate or who have handled receipts or disbursements that they clearly know to be in violation of the stipulations of the state uniform systems of public finance administration and financial management, and against those administrative heads of relevant units and administrative heads of the superior units who have decided to handle, or insisted on handling, receipts or disbursements that they clearly know to be in violation of the stipulations of the state uniform systems of public finance administration and financial management. Criminal liability shall be investigated in accordance with the law in cases where grave economic losses have been incurred to the state.

   Article 28. Administrative sanctions shall be taken against those heads of the superior administrative units who have received written reports from the accounting personnel pursuant to the provisions of the second paragraph of Article 19 of this Law but fail to make a decision on the matter without any justifiable reason, within the stipulated period of time, thus causing grave financial consequences.

   Article 29. Administrative sanctions shall be taken against those administrative heads of units and other personnel who attack or retaliate against the accounting personnel who perform their duties pursuant to this Law. Criminal liability shall be investigated if the circumstances are serious.

CHAPTER VI SUPPLEMENTARY PROVISIONS

   Article 30. Procedures for the administration of accounting work of urban and rural economic collectives shall be jointly formulated by the department of finance under the State Council and the relevant competent authorities according to the principles of this Law.

   Article 31. This Law shall come into force on May 1, 1985.