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DECISION OF THE STANDING COMMITTEE OF THE NATIONAL PEOPLE'S CONGRESS ON AMENDING THE ACCOUNTING LAW

Category  FINANCE Organ of Promulgation  The Standing Committee of the National People's Congress Status of Effect  Amendment
Date of Promulgation  1993-12-29 Effective Date  1993-12-29  

Decision of the Standing Committee of the National People's Congress on Amending the Accounting Law of the People's Republic of China (Attached With the First Revision of the Accounting Law of the People's Republic of China)




Appendix: Accounting Law of the People's Republic of China
Contents
Chapter I  General Provisions
Chapter II  Accounting Practice
Chapter III  Accounting Supervision
Chapter IV  Accounting Offices and Accounting Personnel
Chapter V  Legal Liability
Chapter VI  Supplementary Provisions

(Adopted at the Fifth Meeting of the Standing Committee of the

Eighth National People's Congress on December 29, 1993, promulgated
by Order No.17 of the President of the People's Republic of China
on December 29, 1993 and effective as of the date of itspromulgation.)
(Editor's Note: For the revised text, see the Accounting Law of the
People's Republic of China revised at the Twelveth Meeting of the Standing
Committee of the Ninth National People's Congress on October 31,1999,
promulgated on October 31, 1999 by the Order No.24 of the President of the
People's Republic of China)

    The Fifth Meeting of the Standing Committee of the Eighth
National People's Congress, having considered the proposal
submitted by the State Council on the Draft Amendment to the
Accounting Law of the People's Republic of China, decides to amend
the Accounting Law of the People's Republic of China as follows:

    1. Article 1 is amended as follows:" This Law is formulated in
order to standardize and improve accounting work, to ensure that
accounting personnel exercise their functions and powers according
to law and to bring into play the role of accounting in
safeguarding the order of the socialist market economy,
strengthening economic management and increasing economic results."

    2. Article 2 is amended as follows:" Government agencies,
public organizations, enterprises, institutions, self-employed
industrial and commercial households and other organizations shall
abide by this Law in handling accounting affairs."

    3. The first paragraph of Article 4 is amended as follows:
"The heads of units shall direct the accounting offices, accounting
personnel and other personnel in implementing this Law and shall
ensure the accounting information be legitimate, authentic,
accurate and complete, and protect the functions and powers of accounting personnel from being infringed upon. No one is allowed
to attack or retaliate against accounting personnel."

    4. The second paragraph of Article 6 is amended as follows:"
The departments of finance under the people's governments of the
provinces, autonomous regions, and municipalities directly under
the Central Government, the competent departments of the State
Council and the General Logistics Department of the Chinese
People's Liberation Army may, on condition that this Law and the
uniform accounting system of the State are not contravened,
formulate specific measures or supplementary stipulations for the
implementation of the uniform accounting system of the State and
submit them to the department of finance under the State Council
for examination and approval or for the record."

    5. Item (4) of Article 7 is amended as follows:" increases and
decreases of capital and funds, receipts and outlays of appropriations".

    6. The first paragraph of Article 9 is amended as follows:"In
accounting practice Renminbi shall be used as the base currency for
bookkeeping."

     The second paragraph is amended as follows:" The units whose
receipts and expenditures in transactions are calculated chiefly in
foreign currency may select certain foreign currency as the base
currency for bookkeeping, but the prepared accounting statements
shall be reflected in Renminbi converted from the foreign
currency".

    7. The first paragraph of Article 10 is amended as follows:
"Accounting documents, account books, accounting statements and
other accounting information shall conform to the provisions of the
uniform accounting system of the State, and no accounting documents
and account books may be counterfeited or concocted, and no false
accounting statements may be submitted."

    A paragraph is added to this Article as the second paragraph:"
With respect to the accounting practice conducted with computers,
the requirements for the software used and for the accounting
documents, account books, accounting statements and other
accounting information produced therefrom shall conform to the
provisions of the department of finance under the State Council."

    8. The first paragraph of Article 14 is amended as follows:
"Each unit shall prepare its accounting statements on the basis of the accounting records and in accordance with the provisions of the
uniform accounting system of the State and shall submit such
accounting statements to the department of finance and other
relevant departments."

    9. The first paragraph of Article 19 is amended as follows:"An
accounting office and accounting personnel shall not handle any
unlawful receipts and disbursements."

    The second paragraph is amended as follows: "An accounting
office and accounting personnel shall put a stop to or correct
receipts and disbursements which they believe to be unlawful; if
they fail in their effort, they shall make a written report to the
head of the unit requesting action. The head of the unit shall make
a decision in writing on the matter within 10 days from the date
of receiving the written report and shall be responsible for the
decision."

    Two paragraphs are added as the third and forth paragraph:"An
accounting office and accounting personnel who neither put a stop
to or correct unlawful receipts and disbursements nor submit a
written report to the head of the unit shall also be held
responsible."

    "An accounting office and accounting personnel shall make a
report on the receipts and disbursements which gravely violate the
law and harm the interests of the State and the public to the
competent unit or department of finance, auditing and taxation. The
unit or department receiving the report shall be responsible for
its settlement."

    10. The first paragraph of Article 20 is amended as follows:"
All units must, in accordance with the law and relevant provisions
of the State, accept supervision by departments of finance,
auditing and taxation and must truthfully provide them with
accounting documents, account books, accounting statements, other
accounting information and relevant data. They may not conceal,
falsify or refuse to provide such material and information."

    The second paragraph of Article 20 is deleted.

    11. The first paragraph of Article 21 is amended as follows:"
According to the needs of its accounting work, each unit shall set
up an accounting office or staff a relevant office with accounting
personnel and designate an accountant in charge. Where conditions
do not permit, the unit may entrust its bookkeeping to an
accounting consultancy and service agency established with
approval. Large and medium-sized enterprises, institutions and
competent departments may have accountants-general. The position of an accountant-general shall be assumed by a person with the
professional and technical title of accountant or above."

    12. Article 23 is amended as follows: "Accounting personnel
shall possess necessary professional knowledge. The appointment or
removal of the persons in charge of accounting offices and the
accountants in charge in State-owned enterprises and institutions
shall be approved by the competent units and the said persons and
accountants may not be arbitrarily transferred or replaced. If an
accountant who is loyal to his duty and adheres to principles is
wrongly treated, the competent unit shall instruct the unit in
which he works to correct the mistake; if an accountant proves
himself unsuitable for accounting work because of dereliction of duty and abandonment of principle, the competent unit shall
instruct the unit in which he works to replace or remove him."

    13. Article 26 is amended as follows:" Where heads of units,
accounting personnel and other personnel are found to have
counterfeited, concocted or deliberately destroyed accounting
documents, account books, accounting statements and other
accounting information or used such false accounting documents,
account books, accounting statements and other accounting
information to evade tax and harm the State and public interests,
the departments of finance, auditing and taxation and other
relevant competent departments shall, within their functions and
duties prescribed by the law and administrative rules and
regulations, be responsible for handling the matter and
investigating the responsibility of the said persons. If it
constitutes a crime, criminal responsibility shall be investigated
in accordance with the law."

    14. Article 27 is amended as follows: "Where accounting
personnel have accepted inauthentic and illegitimate original
vouchers or have not submitted a written report on illegitimate
receipts and disbursements to the head of the unit or have not
reported the receipts and outlays, which are gravely in violation
of the law and harmful to the State and public insterests, to the
competent units or departments of finance, auditing and taxation,
administrative sanctions shall be taken against such accounting
personnel if the circumstances are serious; in case such an act
causes grave losses to the public or private property and therefore
constitutes a crime, criminal responsibility shall be investigated
in accordance with the law."

    15. Article 28 is amended as follows: "Where the head of a
unit who, after receiving a written report from accounting
personnel pursuant to the provisions of the second paragraph of Article 19 of this Law, has made a decision on the illegitmate
receipts and disbursements or has failed to make a decision on the
matter within the stipulated period of time  without any
justifiable reason, he shall be given administrative sanctions if
serious consequences are thus caused. If such an act has caused
grave losses to the public or private property and therefore
constitutes a crime, criminal liability shall be investigated in
accordance with the law".

    16. Article 30 is deleted.

    In addition, appropriate adjustments and revisions shall be
made to the wording of some of the clauses.

    This Decision shall go into effect as of the date of its
promulgation.

    The Accounting Law of the People's Republic of China shall be
republished after correspondingly amendments are made according to
this Decision.

Appendix: Accounting Law of the People's Republic of China
(Adopted at the Ninth Meeting of the Standing Committee
of the Sixth National People's Congress on January 21, 1985 and
revised in accordance with the Decision on Amending the Accounting
Law of the People's Republic of China adopted at the Fifth Meeting
of the Standing Committee of the Eighth National People's Congress
on December 29, 1993)(Editor's Note: For the revised text, see Law of the People's Republic of China> revised at the Twelveth Meeting
of the Standing Committee of the Ninth National People's Congress on
October 31, 1999, promulgated by the Order 24 of the President of the
People's Republic of China on October 31, 1999)

Contents

    Chapter  I   General Provisions

    Chapter II   Accounting Practice

    Chapter III  Accounting Supervision

    Chapter IV   Accounting Offices and Accounting Personnel

    Chapter V    Legal Liability

    Chapter VI   Supplementary Provisions
Chapter I  General Provisions

    Article 1  This Law is formulated in order to standardize and
improve accounting work, to ensure that accounting personnel
exercise their functions and powers according to law and to bring
into play the role of accounting in safegarding the order of the
socialist market economy, strengthening economic management and
raising economic results.

    Article 2  Government agencies, public organizations,
enterprises, institutions, self-employed industrial and commercial
households and other organizations shall abide by this
Law in handling accounting affairs.

    Article 3  Accounting offices and accounting personnel must
abide by laws and regulations, and handle accounting affairs,
conduct accounting computation and control and exercise accounting
supervision in accordance with the stipulations of this Law.

    Article 4  The heads of units shall direct their accounting
offices, accounting personnel and other personnel in implementing
this Law and shall ensure the accounting information be
legitimate, authentic, accurate and complete, and protect the
functions and powers of accounting personnel from being infringed
upon. No one is allowed to attack or retaliate against accounting
personnel.

    Moral encouragement and material awards shall be given to the
accounting personnel who have made outstanding achievements in
conscientiously implementing this Law and who are devoted to their
duty.

    Article 5  The department of finance under the State Council
shall administer the accounting work throughout the country.

    The departments of finance under the local people's
governments at various levels shall administer the accounting work
of their respective areas.

    Article 6  A uniform accounting system of the state shall be
formulated by the department of finance under the State Council in
accordance with this Law.

    The departments of finance under the people's governments of the provinces, autonomous regions, and municipalities directly
under the Central Government, the competent departments of the
State Council and the General Logistics Department of the Chinese
People's Liberation Army may, on condition that this Law and the
uniform accounting system of the state are not contravened,
formulate specific measures or supplemental stipulations for the
implementation of the uniform accounting system of the State  and
submit them to the department of finance under the State Council
for examination and approval or for the record.
Chapter II  Accounting Practice

    Article 7  Accounting procedures shall be undertaken and
accounting conducted with respect to the following transactions:

    (1) receipts and disbursements of cash holdings and aluable
securities;

    (2) receipts, issuances, additions, reductions and use of money and articles of property;

    (3) creation and settlement of debts and claims;

    (4) increases and decreases of capital and funds, receipts and
outlays of appropriations;

     (5) computation of revenue, expenses and costs;

     (6) computation and treatment of financial results; and

     (7) other transactions that are subject to accounting
procedures and to accounting.

    Article 8  The fiscal year shall start on January 1 and end on
December 31 on the Gregorian calendar.

    Article 9  In accounting practice Renminbi shall be used as the
base currency for bookkeeping.

    The units whose receipts and expenditures in transactions are
calculated chiefly in foreign currency may select certain foreign
currency as the base currency for bookkeeping, but the prepared
accounting statements shall be reflected in Renminbi converted from
the foreign currency.

    Article 10  Accounting documents, account books, accounting
statements and other accounting information shall conform to the
provisions of the uniform accounting system of the State, and no
accounting documents and account books may be counterfeited or
concocted, and no false accounting statements may be submitted.

    With respect to the accounting practice conducted with
computers, the requirements for the software used and for the
accounting documents, account books, accounting statements and
other accounting information produced therefrom shall conform to
the provisions of the department of finance under the State
Council.

    Article 11  In handling the transactions specified in Article
7 of this Law, original documents must be drawn up or obtained, and
then promptly filed with the accounting office.

    Accounting offices must examine the original documents and
prepare accounting vouchers based on the original documents
examined.

    Article 12  Each unit shall set up its accounting items and
account books in accordance with the provisions of the accounting
system.

    Accounting offices shall keep their books on the basis of the
examined original documents and accounting vouchers in accordance
with the bookkeeping rules stipulated by the accounting system.

    Article 13  Each unit shall set up a property inventory system
and ensure that the accounting records conform to the physical
assets and cash holdings.

    Article 14  Each unit shall prepare its accounting statements
on the basis of the accounting records and in accordance with the
provisions of the uniform accounting system of the state and shall
submit such accounting statements to  the department of finance and
other relevant departments.

    Accounting statements shall be signed or sealed by the unit's
administrative head, the person in charge of the  ccounting office
and the accountant in charge. If the unit has an
accountant-general, he shall also sign or seal the accounting
statements.

    Article 15  Archives shall be established for accounting
documents, account books, accounting statements and other accountin
information in accordance with the relevant state provisions, and
shall be properly retained. The period of retention  of the
archives and the procedures for their destruction  shall be
stipulated jointly by the department of finance under the State
Council and the relevant departments.
Chapter III  Accounting Supervision

    Article 16  The accounting office and accounting personnel of a unit shall exercise accounting supervision over the unit.

    Article 17  Accounting offices and accounting personnel shall
not accept any original documents that are inauthentic or
illegitimate. Original documents which are inaccurately and
incompletely recorded shall be returned for correction or
supplementation.

    Article 18  When an accounting office and accounting personnel
find that the accounting records do not conform to the physical
assets and cash holdings, they shall deal with the issue in
accordance with relevant stipulations. If they have no authority to
handle the case by themselves, they shall report immediately to the
administrative head of their unit requesting an investigation and
a settlement of the issue.

    Article 19  An accounting office and accounting personnel shall
not handle any unlawful receipts or disbursements. An
accounting office and accounting personnel shall put a stop to or
correct receipts and disbursements which they believe to be
unlawful; if they fail in their effort, they shall make a written
report to the head of the unit requsting action. The head of the
unit shall make a decision within 10 days from the date of receiving the written report and shall be responsible for the
decision.

    An accounting office and accounting personnel who neither put
a stop to or correct unlawful receipts and disbursements nor
submit a written report to the head of the unit shall also be held
responsible.

    An accounting office and accounting personnel shall make a
report on the receipts and disbursements which gravely violate the
law and harm the interests of the State and the public to the
competent unit or department of finance, auditing and taxation.
The unit or department receiving the report shall be responsible
for its settlement.

    Article 20  All units must, in accordance with the law and
relevant provisions of the State, accept supervision by
departments of finance, auditing and taxation and must truthfully
provide them with accounting documents, account books, accounting
statements, other accounting information and relevant data. They
may not conceal, falsify or refuse to provide such material and
information.
Chapter IV  Accounting Offices and Accounting Personnel

    Article 21  According to the needs of its accounting work, each
unit shall set up an accounting office or staff a relevant office
with accounting personnel and designate an accountant in charge.
Where conditions do not permit, the unit may entrust its
bookkeeping to an accounting consultancy and service agency
established with approval. Large and medium-sized enterprises,
institutions and competent departments may have
accountants-general. The position of an accountant-general shall
be assumed by a person with the technical title of accountant or
above.

    Accounting offices shall establish an internal auditing
system. A cashier shall not be concurrently in charge of auditing,
taking custody of accounting archives or keeping the revenue,
expense or claims and liability accounts.

    Article 22  The main functions of accounting offices and
accounting personnel shall be:

    (1) to conduct accounting practice pursuant to the provisions
of Chapter II of this Law;

    (2) to exercise accounting supervision pursuant to the
provisions of Chapter III of this Law;

    (3) to formulate specific procedures for handling accounting
affairs in their respective units;

    (4) to participate in the formulation of economic and
business plans, and examine and analyse the results of the
execution of budget and financial plans; and

    (5) to handle other accounting affairs.

    Article 23  Accounting personnel shall possess necessary
professional knowledge. The appointment and removal of the persons
in charge of accounting offices and the accountants in charge in
State-owned enterprises or institutions shall be approved by the
competent units and the said persons and accountants may not be
arbitrarily transferred or replaced. If an accountant who is loyal
to his duty and adheres to principles is wrongly treated, the
competent unit shall instruct the unit in which he works to correct
the mistake; if an accountant proves himself unsuitable for
accounting work because of dereliction of duty and abandonment of principle, the competent unit shall instruct the unit in which he
works to replace or remove him.

    Article 24  Accounting personnel who are being transferred to
other work or leaving their posts must finalize the handing-over
procedure with the persons who are taking over.

    The person in charge of the accounting office and the
accountant in charge shall supervise handing-over procedures for
ordinary accountants. The administrative head of a unit shall
supervise handing-over procedures between the person in charge of the accounting office and the accountant in charge; when necessary,
the superior administrative unit may send people to participate in
the supervision of the hand-over.
Chapter V  Legal Liability

    Article 25  Administrative sanctions shall be taken against
administrative heads of those units and accounting personnel who
have seriously violated the provisions for accounting practice
specified in Chapter II of this Law.

    Article 26  Where heads of units, accounting personnel and
other personnel are found to have counterfeited, concocted or
deliberately destroyed accounting documents, account books,
accounting statements and other accounting information or used such
false accounting documents, account books, accounting statements
and other accounting information to evade tax and harm the State
and public interests, the departments of finance, auditing and
taxation and other relevant competent departments shall, within
their functions and duties prescribed by the law and administrative
rules and regulations, be responsible for handling the matter and
investigating the responsibility of the said persons. If it
constitutes a crime, criminal liability shall be investigated in
accordance with the law.

    Article 27  Where accounting personnel have accepted
inauthentic and illegitimate original vouchers or have not
submitted a written report on illegitimate receipts and
disbursements to the head of the unit or have not reported the
receipts and outlays, which are gravely in violation of the law and
harmful to the State and public interests, to the competent units
or departments of finance, auditing and taxation, administrative
sanctions shall be taken against such accounting personnel if the
circumstances are serious; in case such an act causes grave losses
to the public or private property and therefore constitutes a
crime, criminal liability shall be investigated in accordance with
the law.

    Article 28  Where the head of a unit who, after receiving a
written report from accounting personnel pursuant to the
provisions of the second paragraph of Article 19 of this Law, has
made  a decision on the illegitmate receipts and disbursements or
has failed to make a decision on the matter within the stipulated
period of time without any justifiable reason, he shall be given
administrative sanctions if serious consequences are thus caused.
If such an act causes grave losses to the public or private
property and therefore constitutes a crime, criminal liability
shall be investigated in accordance with the law.

    Article 29  Administrative sanctions shall be taken against
administrative heads of units and other personnel who attack or
retaliate against the accounting personnel who perform their
duties pursuant to this Law.

    Criminal liability shall be investigated if the circumstances
are serious.
Chapter VI  Supplementary Provisions

    Article 30  This Law shall come into force on May 1, 1985.



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