International Accounting And Finance Case Study Solution
Accounting Method Process
The Chinese Ministry of Finance has taken the responsibility to look after the accounting standards. The ministry not only issues the accounting standards but also regulates the accounting policy. Starting from the proposal stage, and continuing towards the draft and asking opinions from the general public, the process ends at the issue stage.
Initially, the accounting department proposes the plan to implement a new accounting method or standard. The accounting department comes under the finance ministry and has to get the approval from China Accounting Standards Committee (CASC).
Later on, if the proposal gets accepted the accounting department appoints draft members. The members are responsible to implement the plan and set the timetable so that the project could end on time. But, before anything, the department have to send the notification to the accounting committee regarding drafting group.
The accounting committee make sure they are taking proper opinions from the public. Therefore advertises about the new standards on major media, and organizes different seminars. The same Drafting group must compile the feedback and submit the final draft to CASC.
After all the major tasks are done the finance ministry must issue the new standards and make sure they are implemented throughout China.
Japan
The ministry of finance administer all the working related to Japanese stock Exchange and making it a non-self-regulated stock exchange. The corporate earnings are largely distributed making them a source of funds. Apart from the corporate section, the strong banking sector has always supported the Japanese economy. Bank credits have become an integral part of the business community in Japan.
Accounting Standards
The tax laws controls the financial reporting system just like in Germany. Just like in China, companies in Japan doesn’t welcome an independent auditor to assess the company’s health.
Just recently, the authorities from IASB and Accounting Standards Board of Japan (ASBJ) sat down and discussed about the accounting standards. It became a necessity as IASB had to ensure that each country is complying by the accounting rules set by the international authorities. FASB was an accounting standard that was initiated by the Accounting Standards Board of Japan (ASBJ). However, in 2005 IASB and ASBJ planned to erase the differences between IFRS and the Japanese GAAP.
Currently, Japan holds four accounting framework that can be chosen by the Domestic and Foreign companies. Japanese GAAP, US GAAP, Japan’s Modified International Standards (JMIS) and IFRS standards. Small firms are known to rely on the Japanese GAAP system. (Anon., 2019) J-GAAP accounting standards seems to work best for the Japanese companies. It has pushed away the more popular IFRS. Though, the local companies working internationally do have the option to change to IFRS or J-GAAP. (eu-japan, n.d.)
Regulation Bodies
The accounting standards are handled by the four bodies. The four of them are; FASF, JICPA, BAC and ASBJ. The Japanese Institute of Certified Public Accountants and Tokyo Certified Public Tax Accountants’ Association are the two professional accountancy Bodies........
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