Unlike Western practice, setting authoritative accounting standards is not the responsibility of the Accounting Society of China (ASC) or the Chinese Institute of Certified Public Accountants (CICPA). Instead the Ministry of Finance (MOF) is responsible for formulating, promulgating and administering accounting regulations. ASC and CICPA are responsible for regulating, governing and monitoring the reform and development of the accounting profession in China. The CICPA also assumes administrative authority, delegated by MOF, to serve as a bridge between the government and practicing accountants.
In China the government issues accounting regulations. They are rules and must be strictly adhered to. With the introduction of the ASBE, individual companies are allowed to exercise judgment in formulating their own accounting policies which will suit specific circumstances.
