Government accounting with Chinese characteristics and challenges

Abstract

This paper explains the Chinese government's decision to adopt accrual accounting by referring to an ancient Chinese strategy of governing. It also provides a rationale for whole-of-government financial reports in China's current fiscal context. The nature of the existing government accounting system is described and the technical and implementation challenges in achieving the goals of the ambitious reform agenda are identified. The country's unique institutional structure makes it necessary to craft a system of government accounting and reporting with Chinese characteristics.

Keywords:

• Accrual accounting
• Chinese government accounting
• Government Finance Statistics (GFS)
• IPSAS
• whole-of-government financial reporting

Notes

* Mencius originally formulated this strategy to win wars by pointing out good weather (tianshi) is less important than favourable geography (dili), and favourable geography is less important than a unified force (renhe).