Laws of the People's Republic of China

Chapter I Gegeral Provisions
Chapter II Business Accounting
Chapter III Accounting Supervision
Chapter IV Accounting Bodies And Accounting Personnel
Chapter V Legal Responsibility
Chapter VI Supplementary Provisions
Chapter I Gegeral Provisions

Article 1. This law is formulated in order to standardize and improve accounting work, ensure that accountants will function in accordance with law, and bring into play the role of accounting in safeguarding the order of the socialist market economy, strengthening economic administration and improving economic efficiency.

Article 2. State bodies, public organizations, enterprises, institutions, self-employed industrialists and businessmen and other organizations shall execute their accounting matters in accordance with this law.

Article 3. The accountancy body and personnel must observe the laws and decrees set down in this Law and abide by them when carrying on the business of accounting and performing accountancy supervision.

Article 4. The leader of a unit shall supervise the accountant departments, accountants and other personnel in implementing this law; make sure that accounting data are lawful, truthful, accurate and complete; and ensure that the functions and powers of accountants are not infringed upon.
No one is allowed to retaliate against an accountant. Accountants who carry out this Law conscientiously, devote themselves to
heir duties and achieve remarkable success in their work will be rewarded appropriately.

Article 5. The financial department of the State Council shall administer the work of national accountancy. The financial department of the local people's government at various levels shall administer accountancy in their region.

Article 6. The national unified accounting system is formulated by the financial department of the State Council in line with this Law. Financial departments of the provinces, autonomous regions and municipalities, competent departments of the State Council and the General Logistics Department of the People's Liberation Army may, under the precondition of not contravening this law and uniform state accounting systems, formulate specific procedures or supplementary provisions for implementing uniform state accounting systems and submit them to the financial authorities for approval or for the record.

Chapter II Business Accounting

Article 7. The following matters should go through accounting procedures and business accounting:

(1) Receipts and payments of funds and/or securities;
(2) The receipt and disposal, increase and decrease and use of a piece of property;
(3) Occurrence and settlement of a credit or debt;
(4) Increase or reduction of capital and funds as well as income and outlays;
(5) Calculations of revenue, expenses or costs;
(6) Calculation and treatment of financial achievements; and
(7) Any other matters necessary for going through accounting procedures and business accounting.

Article 8. The financial year begins on 1 January and ends on 31 December of the Gregorian calendar.

Article 9. Renminbi shall be the unit used in accounting books. Units whose primary income and outlays are in foreign currency (currencies) may choose a certain foreign currency as the unit used for accounting purposes. In such cases, the currency shall be converted into renminbi when compiling accounting statements."

Article 10. Accounting proofs, accounting books, accounting statements and other accounting data shall conform to provisions regarding uniform state accounting systems. Forgery or alteration of accounting proofs or accounting books or submission of false accounting statements are not allowed." When computers are used in accounting, requirements regarding software used and the accounting proofs, accounting books, accounting statements and other accounting data generated therefrom shall conform to State Council and Ministry of Finance provisions.

Article 11. In handling the matters listed in Article 7 of this Law, original vouchers must be filed or presented, and should be handed over to the accounting body in good time. The accounting body must examine the original vouchers and draw up accounting vouchers on the basis of the examined original vouchers.

Article 12. Units may set up their own accounting departments and accounts books in accordance with the provisions of the accounting system. The accounting body, according to the examined original vouchers and accounting vouchers, shall calculate accounts in line with the provisions of the accounting system.

Article 13. Units should set up a property-checking system to ensure that the accounting records conform with the quantities of existing materials and funds.

Article 14. Units shall compile accounting statements according to the uniform state accounting systems and on the basis of accounting books and submit them to the Ministry of Finance and other departments concerned. Accounting reports should be signed or sealed by the unit's administrative head, the leading member of the accounting body and the accountant in charge. Units with a general accountant should also have their accounting reports signed or sealed by him or her.

Article 15. Vouchers, accounts books, reports and other accounting data should be filed and well kept in accordance with the related rules of the State. The time limits for the keeping of accounting files and the methods of their destruction will be decided by the financial department of the State Council jointly with the departments concerned.

Chapter III Accounting Supervision

Article 16. The accounting body and accounting personnel in various units may practise accounting supervision in their own units.

Article 17. The accounting body and accounting personnel should not accept or handle any false or illegal vouchers and should return any inaccurate and incomplete vouchers for correction or completion.

Article 18. When the accounting body and accounting personnel find that differences exist between accounting records and quantities of existing materials and funds, they should deal with them according to the relevant provisions; if the required authority is not held by the particular accounting body or personnel it should immediately be reported to the administrative head of their unit, in order that the truth may be discovered and a decision made.

Article 19. Accounting agencies or accountants shall refuse to handle illegal income and outlays.

Accounting agencies or accountants shall take action to stop or correct illegal income and outlays; where their action is ineffectual, they shall submit a written memorandum asking the unit's leader to handle it. The unit's leader shall, within ten days of receipt of the memorandum, make a decision which shall be put in writing, to which he is held accountable. Accounting agencies or accountants who neither take action to stop or
correct illegal income and outlays nor submit a written memorandum to the unit's leader are also held accountable. Accounting agencies or accountants shall report to the competent unit or financial, auditing, taxation authorities about income and outlays that are severely harmful to the state and public interest. Authorities receiving such a report have the responsibility to deal with it.

Article 20. Various units must, in accordance with the law and related stipulations of the state, accept supervision of financial, auditing and
taxation organizations and truthfully provide accounting vouchers, accounting books, accounting statements, accounting data and other related information. They must not reject such supervision or demand related documents and must not hide documents or make false reports.

Chapter IV Accounting Bodies And Accounting Personnel

Article 21. Various units should establish accounting departments according to the accounting need or establish positions for accountants and
designate a chief accountant in related departments. Units which do not have conditions for establishing accounting departments or hiring accountants may entrust approved accounting consultation and service organizations to do accounting work for them. Large and medium-sized enterprises and large business undertakings may set up a chief accountant, who must have qualifications as a professional accountant.
An accounts-checking system may be set up within an accounting body. Cashiers may not concurrently hold responsibility for checking accounts, keeping accounting files and casting accounts of revenue, expenditure, credits or debits.

Article 22. The main duties of the accounting body and accounting personnel are:

(1) To make business accounting conform with the provisions of Chapter II of this law;
(2) To practice accounting supervision in line with the provisions of Chapter III of this Law;
(3) To work out the main methods of handling accountancy matters within the unit itself;
(4) To take part in the drawing up of economic plans and business plans, and the checking and analysing of the implementation budget and financial plan; and
(5) To handle any other accounting business.

Article 23. Accounting personnel must have necessary professional knowledge. The appointment and removal of chief accountants or responsible persons of accounting departments of state-owned enterprises and business ventures must have the concurrence of higher units having jurisdiction over them. Chief accountants or responsible persons of accounting departments must not be appointed or removed willfully. If faithful accounting personnel who adhere to principle are treated in an improper manner, the higher units having jurisdiction over those enterprises or ventures should order those enterprises or ventures to take remedial measures. If accounting personnel neglect their duties, lack principles or are unsuitable for accounting work, the higher units should order concerned units to transfer or dismiss those unqualified accounting personnel.

Article 24. In the case of an accountant being removed or leaving his post, whether temporarily or permanently, he should conduct the handing over procedures in a competent manner with his successor. Handing over procedures conducted by a common accountant should be supervised by a leading member of the accounting body or the accountant in charge. The procedures conducted by a leading member of the accounting body or the accountant in charge should be supervised by the administrative head of the unit and, if necessary, under the joint supervision of the administrative head of the unit and the person being replaced by the higher competent authority.

Chapter V Legal Responsibility

Article 25. If any administrative head of a unit or any accounting personnel violate the provisions of business accounting set forth in Chapter II of this Law, they may have imposed on them administrative sanctions, if the case is of a serious nature.

Article 26. Leaders, accounting personnel and other staff members of various units who prepare false accounting vouchers, change or intentionally
destroy vouchers, accounting books, accounting statements, accounting data and other related information, or if they use false accounting vouchers, accounting books, accounting statements and other accounting information and thus infringe upon interests of the state, society and the public shall be handled and investigated for their roles in these activities by financial, auditing, taxation and other related responsible units in accordance with the law and administrative rules and regulations. Those whose actions constitute crimes shall be investigated for their criminal responsibility.

Article 27. Accounting personnel who accept and handle unlawful accounting vouchers, who do not make written comments to leaders of respective units on illegal income and expenditures, or if they do not make reports to higher units or financial, auditing and taxation organizations, will be given administrative punishment if the situation is serious. Accounting personnel who are responsible for major losses to government or private properties and whose actions constitute crimes shall be investigated for their criminal responsibility in accordance with the law.

Article 28. If the leaders of various units, after receiving the written comments of accounting personnel in compliance with paragraph 2 of Article 19 of this law, still approve of such illegal income or expenditures or if they take no remedial action within a certain period without a proper reason
and in this manner cause serious consequences, they shall be given administrative punishment. If their action or inaction causes severe harm to state and public interests and constitute crimes, they shall be investigated for their criminal responsibility.

Article 29. If an administrative head in a unit or other persons dispute the decisions of accountants who have carried out their duties in accordance with this Law, they should be imposed upon with administrative sanctions or investigated with regard to criminal responsibility in accordance with the law, if the case is a serious one.

Chapter VI Supplementary Provisions

Article 30. This Law shall come into effect on May 1, 1985. Amendments to this Law shall come into force on the date of promulgation [December 29,1993].