Corporate governance and the harmonisation of Chinese accounting practices with IFRS practices

Abstract

China has reformed its enforcement mechanisms of accounting practices, in particular, corporate governance, in order to facilitate the harmonisation of Chinese accounting practices with IFRS practices. However, this research reveals that the reformed corporate governance has not made a significant contribution towards this harmonisation. The move of Chinese accounting practices towards IFRS practices is mainly due to the CSRC's 2001 compulsory harmonisation policy of eliminating the earnings gap. Corporate governance as an important enforcement mechanism for accounting standards has yet to be effective. © 2007 The Authors.