Article 1

This law is made for the purposes of regulating accountancy, ensuring the truthfulness and completeness of accounting information, strengthening economic and financial management, enhancing economic efficiency and safeguarding the order of the socialist market economy.

Article 2

State organs, public organizations, companies, enterprises, institutions and other bodies (hereinafter referred to as units) shall perform accounting in accordance with this Law.

Article 3

All units shall maintain books and ensure their truthfulness and completeness in accordance with the law.

Article 4

Persons in charge of the units shall be responsible for the truthfulness and completeness of the accounting work and accounting information of their units.

Article 5

Accounting offices and accounting personnel shall perform accounting computation and carry out accounting supervision in accordance with this Law. No unit or individual may, by whatever means, instruct, cause and/or force accounting offices or accounting personnel to forge and/or modify accounting vouchers, books and other accounting information to provide false financial and accounting reports. No unit or individual may retaliate against accounting personnel who, in accordance with this Law, perform their duties and boycott acts that are in violation of the provisions of this Law.

Article 6
Spiritual or material award shall be given to accounting personnel who conscientiously enforce this Law, faithfully discharge their duties and stand by the principles, achieving significant results.

Article 7

The financial department of the State Council shall take charge of the accounting work of the whole nation. The financial departments of the people's governments at county level and above shall take charge of the accounting work within their respective administrative areas.

Article 8

The nation practises a uniform accounting system. The uniform accounting system of the nation shall be devised and announced by the financial department of the State Council in accordance with this Law. The relevant departments of the State Council may, in accordance with this Law and the uniform accounting system of the nation, devise concrete methods or supplementary rules, to be reported to the financial department of the State Council for scrutiny and approval, for the implementation of the uniform accounting system of the nation for sectors with special needs regarding accounting computation and accounting supervision. The General Logistics Department of the People's Liberation Army may, in accordance with this Law and the uniform accounting system of the nation, devise concrete methods, to be reported to the financial department of the State Council for the record, for the implementation of the uniform accounting system of the nation within the military.

Chapter II Accounting Computation

Article 9

All units must, with regard to economic matters that actually take place, perform accounting computation, prepare accounting vouchers, make accounting entries in the books and compile financial and accounting reports. No unit may perform accounting computation based on false economic matters or information.

Article 10

Accounting procedures and accounting computation shall be performed for the following economic matters:

(1) the collection and delivery of funds and securities;
(2) the receipt and despatch, addition or subtraction, and the use of valuables;
(3) the occurrence and calculation of debt as regards right and obligation;
(4) the addition or subtraction of capitals and/or funds; (5) the calculation of incomes, outgoings, expenses and costs;
(6) the calculation and handling of financial gains;
(7) other matters for which accounting procedures and accounting computation need to be performed.

Article 11

An accounting year begins on March 1 and ends on December 31 of the western calendar.

Article 12

Renminbi shall be the currency denomination for accounting entries in accounting computation. For business incomes and outgoings mainly in currencies other than the Renminbi, one of the currencies may be chosen as the denomination for accounting entries. However, conversion into Renminbi shall be performed in financial and accounting reports compiled.

Article 13

Accounting vouchers, books, financial and accounting reports and other accounting information must meet the requirements of the uniform accounting system of the nation. Where computer is employed for the performance of accounting computation, its software and the accounting vouchers, books, financial and accounting reports and other accounting information produced by it must also meet the requirements of the uniform accounting system of the nation.

No unit or individual may forge and/or modify accounting vouchers, books and other accounting information, nor may false financial and accounting reports be provided.
Article 14

Accounting vouchers include original vouchers and entry vouchers. In attending to economic matters referred to in Article 10, original vouchers must be prepared or obtained and turned over to the accounting office timely. Accounting offices and accounting personnel shall, in accordance with the requirements of the uniform accounting system of the nation, verify the original vouchers. False and unlawful original vouchers may be rejected, with report made to the person in charge of the unit. For inaccurate and incomplete original vouchers, they may be returned with a request for their correction and supplement in accordance with the uniform accounting system of the nation. Entries made in the original vouchers shall not be amended. Incorrect original vouchers shall be replaced or corrected by the issuing unit with the seal of the issuing unit affixed at positions of correction. Where the original vouchers carry incorrect amounts, they shall be replaced by the issuing unit; correction shall not be made on the original vouchers. Entry vouchers shall be prepared based on the verified original vouchers and relevant information.

Article 15

Entries in the books must be made on the basis of verified accounting vouchers, with the requirements of the law, administrative rules and regulations and the uniform accounting system of the nation met. Books include the general ledger, sub-ledgers, day ledgers and other supplementary books. Entries shall be made in the books following the order of pages bearing consecutive numbers. For incorrect entries, page skipped, missing number and line skipped in the books, corrections shall be made in accordance with the requirements of the uniform accounting system of the nation, with a seal affixed by accounting personnel and persons in charge of the accounting offices (accounting supervisors) at positions where corrections are made. For accounting computation performed using computer, the entries and corrections in the books shall meet the requirements of the uniform accounting system of the nation.

Article 16

Entries shall be made and accounting computation performed in the books maintained in accordance with the law for economic matters that take place in the units. Books shall not be maintained without authority for making entries and performing accounting computation in violation of this Law or the requirements of the uniform accounting system of the nation.

Article 17

The units shall, on a regular basis, check the book entries against the physical items, funds and relevant information to ensure that the book entries tally with the actual amount of physical items and funds, that the book entries tally with the contents of accounting vouchers, that the corresponding entries in different books are consistent and that the book entries are consistent with the contents of accounting statements.

Article 18

Accounting doctrines adopted by the units shall remain uniform throughout. Changes may not be made at will. Where changes are really necessary, they shall be made in accordance with the requirements of the uniform accounting system of the nation, with the reasons for the changes and the state and implications of the changes set forth in the financial and accounting reports.

Article 19

Contingent liabilities like guarantees made by the units or outstanding litigation shall be set forth in the financial and accounting reports in accordance with the requirements of the uniform accounting system of the nation.

Article 20

Financial and accounting reports shall be prepared on the basis of verified book entries and relevant information and meeting the requirements of this Law and the uniform accounting system of the nation regarding compilation of financial and accounting reports, targets to be served and the period of provision. Where other laws and administrative rules and regulations contain other requirements, they shall be followed. Financial and accounting reports include accounting statements, notes to accounting statements and notes on the financial position.

The basis for the compilation of financial and accounting reports provided to different users of accounting information shall be the same. Where the relevant laws, administrative rules and regulations provide that accounting statements, notes to accounting statements and notes on the financial position shall be audited by registered accountants, the audit report issued by the registered accountant and his accounting firm shall be made available with the financial and accounting reports.

Article 21

Financial and accounting reports shall be signed and sealed by the persons in charge of the units and the persons in charge of the accounting work or persons in charge of accounting offices (accounting supervisors). For units with a chief accountant, the chief accountant shall also sign and seal. Persons in charge of the units shall ensure that the financial and accounting reports are true and complete.

Article 22

The language for accounting entries shall be the Chinese language. In national autonomous areas, a language for the nationality in general use in the area may be used for the accounting entries at the same time. For foreign-invested enterprises, foreign enterprises and other foreign organizations in the People's Republic of China, a kind of foreign language may be used for their accounting entries at the same time.

Article 23

The units shall open files for accounting vouchers, books, financial and accounting reports and other accounting information and keep them in safe custody. The period for which accounting files shall be kept and the method of their destruction shall be set by the financial department of the State Council in conjunction with relevant departments.

Chapter III Special Provisions on Accounting Computation for Companies and Enterprises

Article 24

Companies and enterprises performing accounting computation shall observe the provisions in this Chapter in addition to those in Chapter 2.

Article 25
Companies and enterprises must, with regard to economic matters that actually take place and in accordance with the requirements of the uniform accounting system of the nation, confirm, quantify and record assets, liabilities, equity interests, incomes, expenses, costs and profits.

Article 26

Companies and enterprises performing accounting computation shall not:

(1) willfully vary the standard for confirming or the method of quantifying assets, liabilities and equity interests, and/or make up, inflate, omit or deflate assets, liabilities and equity interests;
(2) make up or conceal incomes, and/or put off or bring forward confirmation of incomes;
(3) willfully vary the standards for confirming or the method of quantifying expenses and costs, and/or make up, inflate, omit or deflate expenses and costs;
(4) willfully vary the method of computation and/or distribution of profits, and/or make up profits or conceal profits.
(5) engage in other acts in violation of the requirements of the uniform accounting system of the nation.

Chapter IV Accounting Supervision

Article 27

The units shall establish and make sound their own internal systems of accounting supervision. The internal systems of audit of the units shall meet the following requirements:

(1) The duties and authority of the book-keepers and the approvers, handlers of economic matters and accounting matters and custodians of valuables shall be clear and separate and keep one another in check.
(2) The procedures shall be clear for the mutual supervision and mutual check as regards the decision making and execution concerning major external investments, disposal of assets, allocation of funds and other important economic matters.
(3) The scope, period and organization procedures for discovery of properties shall be clear.
(4) The methods and procedures for regular internal audit of accounting information shall be clear.

Article 28
Persons in charge of the units shall ensure that accounting offices and accounting personnel discharge their duties in accordance with the law.

Accounting offices and accounting personnel shall not be instructed, caused or forced to attend to accounting matters in a manner in violation of the law. For accounting matters in violation of this Law or the uniform accounting system of the nation, accounting offices and accounting personnel have the right to refuse to attend to them or to correct them by virtue of their duties and authority.

Article 29

Where accounting offices and accounting personnel find that book entries do not tally with the physical items, funds or relevant information, they shall handle it timely where they have the right so to do on their own under the uniform accounting system of the nation. Where not, a report shall be made immediately to the person in charge of the unit to seek an investigation to establish the causes and handle the matter.

Article 30

Any unit and individual enjoys the right to report acts that breaches this Law and the uniform accounting system of the nation. Where the department receiving the report has the power of handling, handling shall take place timely in accordance with the law and the division of responsibilities. Where not, a transfer to the department with the power of handling shall take place timely.

The department receiving the report and the handling department shall maintain confidentiality for the informer. The name of the informer and materials reported shall not be disclosed to the unit and individual against whom the report was made.

Article 31

Units to be audited by registered accountants pursuant to the relevant laws and administrative rules and regulations shall honestly turn over to the assigned accounting firms the accounting vouchers, books, financial and accounting reports, other accounting information and relevant materials. No unit or individual may demand or hint the registered accountants and their accounting firms to issue untrue or inappropriate audit reports. The financial department has the power to exercise supervision over the procedures by which the accounting firms issue audit reports and the contents of the reports.

Article 32

The financial department exercises supervision over the following:

(1) whether books are maintained in accordance with the law;
(2) whether accounting vouchers, books, financial and accounting reports and other accounting information are true;
(3) whether the accounting computation meets the requirements of this Law and the uniform accounting system of the nation;
(4) whether personnel engaged in accounting work possess qualifications for the job.

When major violation of the law is suspected in the exercise of supervision over matters listed in (b) above, the financial department of the State Council and its agency may make relevant enquiries with units having financial dealings with the supervised units and the financial institutions with which the supervised units maintain accounts. The units and financial institutions concerned shall give cooperation.

Article 33

Financial, auditing and taxation departments, the People's Bank and departments regulating securities and insurance matters shall, in line with their duties as provided for by the law and the administrative rules and regulations, exercise supervision and inspection over the accounting information of the units concerned. The supervisory and inspecting departments listed in the preceding paragraph shall, after exercising supervision and inspection over the accounting information of the units concerned in accordance with the law, make a post-inspection conclusion. Where the post-inspection conclusion made by the supervisory and inspecting department concerned meets the needs of other supervisory and inspecting departments in discharging their own duties, those supervisory and inspecting departments shall make use of it and avoid repeated inspection.

Article 34

It shall be the obligation of the departments and their personnel exercising supervision and inspection over the accounting information of the units concerned to treat in confidence state secrets and commercial secrets that come to their knowledge in the course of exercising supervision and inspection.

Article 35

The units shall, in accordance with the law and the administrative rules and regulations, accept the exercise of supervision and inspection by the supervisory and inspecting departments concerned and honestly provide accounting vouchers, books, financial and accounting reports, other accounting information and relevant information without refusal, concealment and falsehood.

Chapter V Accounting Offices and Accounting Personnel

Article 36

The units shall, in accordance with the needs of the accounting work, install accounting offices or install accounting personnel with accounting supervisors appointed in relevant offices. Where conditions for such installation are lacking, intermediaries approved to set up a business to undertake accounting work for others shall be entrusted to undertake accounting in a fiduciary capacity. Large and medium-sized enterprises which are state-owned or which have a controlling stake or leading role held by state interests, must install a chief accountant. The job qualifications, procedure for installation and removal, and the duties and authority of the chief accountant shall be set by the State Council.

Article 37

The accounting offices shall set up an internal checking system. Shroffs shall not double up the duties of checking, custody of accounting files and making entries in the ledgers of incomes, outgoings, expenses, debtors and creditors.

Article 38

Personnel engaged in accounting work must obtain a certificate of job qualifications for accounting work. Those acting as persons in charge of accounting offices of units (accounting supervisors) shall, in addition to obtaining a certificate of job qualifications for accounting work, possess professional qualifications as accountants or above or three years' experiences in accounting work or more. The management system over the job qualifications of accounting personnel shall be set by the financial department of the State Council.

Article 39

Accounting personnel shall observe professional ethics and enhance job quality. Education and training for accounting personnel shall be stepped up.

Article 40

Personnel against whom criminal liability are pursued in accordance with the law for illegal acts connected with accounting work like providing false financial and accounting reports; false accounting; concealment or deliberate destruction of accounting vouchers, books and financial and accounting reports; corruption; embezzlement of funds and infringement on duties may not obtain or renew the certificate of job qualifications for accounting work. Apart from the personnel referred to in the preceding paragraph, personnel whose certificates of job qualifications for accounting work are revoked for illegal and/or delinquent acts may not obtain a fresh certificate of job qualifications for accounting work within five years of the revocation of their certificates of job qualifications for accounting work.

Article 41

Accounting personnel transferred to other duties or leaving the job must complete the handover with those taking over. Handover by ordinary accounting personnel shall be overseen by persons in charge of accounting offices (accounting supervisors). Handover by persons in charge of accounting offices (accounting supervisors) shall be overseen by persons in charge of the units, joined when necessary by people sent by the supervisory units.

Chapter VI Legal Liability

Article 43

Criminal liability shall be pursued where forgery and/or modification of accounting vouchers and/or books and the preparation of false financial and accounting reports constitute the commission of a crime. Acts mentioned in the preceding paragraph not constituting the commission of a crime shall be reported by the financial departments of the people's governments at county level and above and attract the imposition of a fine ranging from 5,000 yuan to 100,000 yuan on the unit, whereas fines of between 3,000 yuan and 50,000 yuan may be imposed upon persons directly in charge and other persons of direct responsibility, and for those who are state functionaries, administrative sanctions ranging from removal from office to dismissal shall also be awarded in their units or the relevant units, whereas for those who are accounting
personnel, their certificates of job qualifications for accounting work shall also be revoked by the financial departments of people's governments at county level and above.

Article 44

Criminal liability shall be pursued where the concealment and/or deliberate destruction of accounting vouchers, books, and financial and accounting reports constitute the commission of a crime. Acts mentioned in the preceding paragraph not constituting the commission of a crime shall be reported by the financial departments of the people's governments at county level and above and attract the imposition of a fine ranging from 5,000 yuan to 100,000 yuan on the unit, whereas fines of between 3,000 yuan and 50,000 yuan may be imposed upon persons directly in charge and other persons of direct responsibility, and for those who are state functionaries, administrative sanctions ranging from removal from office to dismissal shall also be awarded in their units or the relevant units, whereas for those who are accounting personnel, their certificates of job qualifications for accounting work shall also be revoked by the financial departments of people's governments at county level and above.

Article 45

Criminal liability shall be pursued in accordance with the law, where the commission of a crime is constituted, for instructing, causing and/or forcing accounting offices, accounting personnel and other personnel to forge and/or modify accounting vouchers, books, and financial and accounting reports and/or prepare false financial and accounting reports or conceal and/or deliberately destroy accounting information that should be kept pursuant to the law. Where the commission of a crime is not constituted, a fine ranging from 5,000 yuan to 50,000 yuan may be imposed and for those who are state functionaries, administrative sanctions in the form of demotion, removal from office or dismissal shall also be awarded by their units or the relevant units in accordance with the law.

Article 46

Criminal liability shall be pursued in accordance with the law where the commission of a crime is constituted in connection with retaliation, by way of demotion, removal from office, transfer from the post, termination of employment or dismissal, by persons in charge of the units against accounting personnel who perform their duties in accordance with the law and boycott acts that are in violation of the provisions of this Law. Where the commission of a crime is not constituted, administrative sanctions shall be awarded in accordance with the law by their units or the relevant units. Accounting personnel retaliated against shall have their reputation restored and be reinstated with the same duties and the same rank.

Article 47

Criminal liability shall be pursued in accordance with the law where the commission of a crime is constituted in connection with the abuse of power, dereliction of duty, favoritism and corrupt practices or the leakage of state secrets and/or commercial secrets on the part of functionaries of financial departments and relevant administrative departments in the course of the exercise of supervision and management. Where commission of a crime is not constituted, administrative sanctions shall be awarded in accordance with the law.

Article 48

Violation of Article 30 of this Law by personnel through the disclosure of the name of the informer and the materials reported to the unit or individual against whom the report was made shall attract the award of administrative sanctions by their units or the relevant units in accordance with the law.

Article 49

Violation of the provisions of this Law that constitute the violation of other legal provisions shall attract sanctions by the relevant departments within their respective purviews.

Chapter VII Supplementary Provisions

Article 50

The following terms used in this Law mean: Persons in charge of units mean the statutory representatives of the units or the main responsible persons named by the law or the administrative rules and regulations to exercise functions on behalf of the units. The uniform accounting system of the nation means the system set by the financial department of the State Council in accordance with
the law for the management of accounting computation, accounting supervision, accounting offices, accounting personnel and accounting work.

Article 51

The concrete method of accounting management for individual traders shall be separately set by the financial department of the State Council in accordance with the principles of this Law.

Article 52

This Law shall be implemented from 1 July 2000.

Promulgated by The Standing Committee of the National People's congress on 1999-10-31