Laws of the People's Republic of China

    The Fifth Meeting of the Standing Committee of the Eighth
National People's Congress, having considered the proposal
submitted by the State Council on the Draft Amendment to the
Accounting Law of the People's Republic of China, decides to amend
the Accounting Law of the People's Republic of China as follows:

    1. Article 1 is amended as follows:" This Law is formulated in
order to standardize and 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
safeguarding the order of the socialist market economy,
strengthening economic management and increasing economic results."

    2. Article 2 is amended as follows:" Government agencies,
public organizations, enterprises, institutions, self-employed
industrial and commercial households and other organizations shall
abide by this Law in handling accounting affairs."

    3. The first paragraph of Article 4 is amended as follows:
"The heads of units shall direct the accounting offices, accounting
personnel and other personnel in implementing this Law and shall
ensure the accounting information be legitimate, authentic,
accurate and complete, and protect the functions and powers of accounting personnel from being infringed upon. No one is allowed
to attack or retaliate against accounting personnel."

    4. The second paragraph of Article 6 is amended as follows:"
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 specific measures or supplementary stipulations for the
implementation of the uniform accounting system of the State and
submit them to the department of finance under the State Council
for examination and approval or for the record."

    5. Item (4) of Article 7 is amended as follows:" increases and
decreases of capital and funds, receipts and outlays of appropriations".

    6. The first paragraph of Article 9 is amended as follows:"In
accounting practice Renminbi shall be used as the base currency for
bookkeeping."

     The second paragraph is amended as follows:" The units whose
receipts and expenditures in transactions are calculated chiefly in
foreign currency may select certain foreign currency as the base
currency for bookkeeping, but the prepared accounting statements
shall be reflected in Renminbi converted from the foreign
currency".

    7. The first paragraph of Article 10 is amended as follows:
"Accounting documents, account books, accounting statements and
other accounting information shall conform to the provisions of the
uniform accounting system of the State, and no accounting documents
and account books may be counterfeited or concocted, and no false
accounting statements may be submitted."

    A paragraph is added to this Article as the second paragraph:"
With respect to the accounting practice conducted with computers,
the requirements for the software used and for the accounting
documents, account books, accounting statements and other
accounting information produced therefrom shall conform to the
provisions of the department of finance under the State Council."

    8. The first paragraph of Article 14 is amended as follows:
"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 and shall submit such
accounting statements to the department of finance and other
relevant departments."

    9. The first paragraph of Article 19 is amended as follows:"An
accounting office and accounting personnel shall not handle any
unlawful receipts and disbursements."

    The second paragraph is amended as follows: "An accounting
office and accounting personnel shall put a stop to or correct
receipts and disbursements which they believe to be unlawful; if
they fail in their effort, they shall make a written report to the
head of the unit requesting action. The head of the unit shall make
a decision in writing on the matter within 10 days from the date
of receiving the written report and shall be responsible for the
decision."

    Two paragraphs are added as the third and forth paragraph:"An
accounting office and accounting personnel who neither put a stop
to or correct unlawful receipts and disbursements nor submit a
written report to the head of the unit shall also be held
responsible."

    "An accounting office and accounting personnel shall make a
report on the receipts and disbursements which gravely violate the
law and harm the interests of the State and the public to the
competent unit or department of finance, auditing and taxation. The
unit or department receiving the report shall be responsible for
its settlement."

    10. The first paragraph of Article 20 is amended as follows:"
All units must, in accordance with the law and relevant provisions
of the State, accept supervision by departments of finance,
auditing and taxation and must truthfully 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."

    The second paragraph of Article 20 is deleted.

    11. The first paragraph of Article 21 is amended as follows:"
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. Where conditions
do not permit, the unit may entrust its bookkeeping to an
accounting consultancy and service agency established with
approval. 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
professional and technical title of accountant or above."

    12. Article 23 is amended as follows: "Accounting personnel
shall possess necessary professional knowledge. The appointment or
removal of the persons in charge of accounting offices and the
accountants in charge in State-owned enterprises and institutions
shall be approved by the competent units and the said persons and
accountants may not be arbitrarily transferred or replaced. If an
accountant who is loyal to his duty and adheres to principles is
wrongly treated, the competent 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 competent unit shall
instruct the unit in which he works to replace or remove him."

    13. Article 26 is amended as follows:" Where heads of units,
accounting personnel and other personnel are found to have
counterfeited, concocted or deliberately destroyed accounting
documents, account books, accounting statements and other
accounting information or used such false accounting documents,
account books, accounting statements and other accounting
information to evade tax and harm the State and public interests,
the departments of finance, auditing and taxation and other
relevant competent departments shall, within their functions and
duties prescribed by the law and administrative rules and
regulations, be responsible for handling the matter and
investigating the responsibility of the said persons. If it
constitutes a crime, criminal responsibility shall be investigated
in accordance with the law."

    14. Article 27 is amended as follows: "Where accounting
personnel have accepted inauthentic and illegitimate original
vouchers or have not submitted a written report on illegitimate
receipts and disbursements to the head of the unit or have not
reported the receipts and outlays, which are gravely in violation
of the law and harmful to the State and public insterests, to the
competent units or departments of finance, auditing and taxation,
administrative sanctions shall be taken against such accounting
personnel if the circumstances are serious; in case such an act
causes grave losses to the public or private property and therefore
constitutes a crime, criminal responsibility shall be investigated
in accordance with the law."

    15. Article 28 is amended as follows: "Where the head of a
unit who, after receiving a written report from accounting
personnel pursuant to the provisions of the second paragraph of Article 19 of this Law, has made a decision on the illegitmate
receipts and disbursements or has failed to make a decision on the
matter within the stipulated period of time  without any
justifiable reason, he shall be given administrative sanctions if
serious consequences are thus caused. If such an act has caused
grave losses to the public or private property and therefore
constitutes a crime, criminal liability shall be investigated in
accordance with the law".

    16. Article 30 is deleted.

    In addition, appropriate adjustments and revisions shall be
made to the wording of some of the clauses.

    This Decision shall go into effect as of the date of its
promulgation.