Studies On International Harmonization Of Accounting In China

With economy globalization and the increasing internationalization of capital markets, international harmonization and global convergence of accounting standards have become an inconvertible trend and also become one of the key issues greatly concerned by accounting scholars, practitioners and regulators. Obviously, the great efforts made either by IASB or by other international organizations to improve the global convergence of accounting standards and the active participation of countries worldwide, are commonly aimed at the same target, namely enhancing the comparability of financial information between different countries and regions. Therefore, the author believes that the international harmonization of accounting practice has been more emphasized than that of accounting standards.Taking assets-related events as an example and using several quantitative methods including Jaccard Coefficient, on one hand this paper examines and analyses the harmonization degree between China's accounting standards (CAS) and international accounting standards (IAS3)and its changes on different stages during China's accounting reforms since 1998; on the other hand, based on the related accounting policies adopted respectively in the domestic and oversea annual reports of B-share companies, the paper also measures the degree and process of international harmonization of China's accounting practice. Nevertheless, the paper examines the relationship between the two types of accounting harmonization directively through several non-parameter statistic methods.During the period examined, as to the international harmonization of accounting standards, the outcomes suggest that the harmonization degree between CAS and IAS has increased step by step remarkably, which suggests that the accounting reforms during this period, especially the issuance of the new CAS 2006, have achieved great success on the internalization of CAS, at least in the area of asset-related measurement. By now, CAS has converged with IFRS substantially. But there are still some moderate differences between CAS and IFRS due to the specific situation of China.As to the international harmonization of accounting practice, the results reveal that on both the Stage A and B, related accounting practice has reached high degree harmony averagely, but the harmony degrees of practice comparable items have decreased universally from Stage A to B.As to the relationship between accounting harmonization of standards and practice, the outcomes imply that on both of the two stages (A, B), the harmonization degree of accounting practice is significantly higher than that of accounting standards, which suggests the existence of spontaneous harmonization of accounting practice. The fact that the international harmonization degree of China's accounting practice has decreased between stage A and B while that of China's accounting standards has increased remarkably, implies that besides the standards harmonization, many other factors do have effects on practice harmonization. But the significant and positive relevance between the harmonization degree of accounting standards and that of accounting practice suggests that the former is still one of the important effectors of the latter. Therefore, we can expect reasonably that the difference of accounting policy choice between domestic and oversea annual reports will decrease after the list companies start to comply with the new CAS2006 in 2007.The main contributions of this paper are as follows: Firstly, it measures both the international harmonization degree of China's accounting standards and that of accounting practice by using the method of Jaccard Coefficient, and for the first time it examines the international harmonization process by using several non-parameter statistic methods, which enriches the quantitative research on international accounting harmonization. Secondly, it offers the latest and straight evidence for the degree of the harmonization or convergence between the new CAS system and IFRS. Thirdly, it is for the first time in China that the relationship between the two types of accounting harmonization is examined directly by testing the statistic relevance between them.