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TABLE OF CONTENTS CHAPTER I GENERAL PROVISIONS CHAPTER II FORMULATION OF ANNUAL REPORTS ON FINAL ACCOUNTS CHAPTER III CONSOLIDATION OF STATEMENTS FOR FINAL ACCOUNTS CHAPTER IV DISCLOSURE OF FINAL ACCOUNTS INFORMATION CHAPTER V FINAL ACCOUNTS AUDIT CHAPTER VI THE SUBMISSION OF REPORTS ON FINAL ACCOUNTS CHAPTER VII PUNISHMENT PROVISIONS CHAPTER VIII SUPPLEMENTARY PROVISIONS CHAPTER I GENERAL PROVISIONS Article 1. In order to strengthen the supervision over the financial affairs of the contributed enterprises of the State-owned Assets Supervision and Administration Commission of the State Council (hereinafter referred to the SASAC), to standardize the formulation of enterprises' annual reports on final accounts and to get full knowledge of the assets quality and operating effectiveness of enterprises, the present Measures are formulated in accordance with the relevant accounting regulations of the state. Article 2. The enterprises shall abide by the present Measures when formulating the annual reports on annual final accounts. Article 3. The term "annual reports on final accounts" mentioned in the present Measures refers to the documents made by enterprises on the basis of the pertinent records in the account books and the relevant accounting materials by following the accounting regulations of the state and the unified standards, statement formats and statement-making requirements, which shall reflect the basic information about the operations of the enterprises such as the status of assets, financial status and annual operation achievements on the closing date by the end of a fiscal year, the cash flow and the maintenance and appreciation of state-owned assets. The annual reports on final accounts shall consist of annual statements for final accounts, notes to annual statements, annual financial status report and other materials related to the production, operation and management required by the SASAC. Article 4. Except the special enterprises involving state security, an enterprise's statements for annual final accounts and notes to statement shall, in accordance with the relevant regulations of the state, be audited by a qualified accounting firm and certified public accountants. The auditing report issued by an accounting firm is an essential attachment to the enterprise's annual reports on final accounts. Both of them shall be submitted to the higher level simultaneously. Article 5. The SASAC shall, in accordance with the law, conduct supervision over the enterprises' formulation of annual reports on final accounts and the auditing quality, and shall examine the authenticity and completeness of the enterprises' reports on final accounts. CHAPTER II FORMULATION OF ANNUAL REPORTS ON FINAL ACCOUNTS Article 6. By the end of each fiscal year the enterprises and their subsidiary enterprises of all levels shall, in accordance with the accounting regulations of the state and other accounting standards and on the basis of overall check of properties, confirmation of credits and debts and verification of assets quality, carefully formulate annual reports on final accounts, which shall reflect the enterprise's annual financial status and operation achievements comprehensively, completely, authentically and accurately. The term "the subsidiary enterprises of all levels" mentioned in the present Measures include the enterprises' wholly-funded subsidiary enterprises and holding subsidiary enterprises at home and abroad, and various branches, public institutions and construction projects adopting independent accounting system. Article 7. When formulating annual reports on final accounts, an enterprise and its subsidiary enterprises of all levels shall abide by the accounting principle of comprehensiveness and completeness and meet the following requirements: (1) The reports on final accounts shall be based on all the economic operations occurred in a fiscal year and the account books, shall comprehensively and fully reflect the incomes, costs (expenses) and cash flow (ins and outs) of all the economic operations of this enterprise and shall not miss any item; (2) The enterprise may not have financial and accounting items not covered in the reports on final accounts, may not have off-the-book assets or may not establish off-the-book account book, and may not set up any "private coffer" with any excuses; (3) The enterprise shall list all its subsidiary enterprises into the formulation scope of annual reports on final accounts to reflect its overall financial status; (4) The enterprise's subsidiary operating public institutions shall implement the unified enterprise accounting system in accordance with the relevant provisions. Those who fail to implement the unified enterprise accounting system for the time being shall incorporate the content related to final accounts into the enterprise's final accounts scope to reflect the overall operating achievements; and (5) The enterprise shall incorporate its construction projects into its financial accounts in pursuance of the relevant regulations. If it fails to do so for the time being, it shall incorporate the items related to the final accounts of the construction projects into the enterprise's final accounts scope for the purpose of reflecting the comprehensive status of its assets. Article 8. When formulating annual reports on final accounts, an enterprise and its subsidiary enterprises of all levels shall abide by the accounting principle of authenticity and exactness and shall meet the following requirements: (1) The enterprise shall formulate reports on final accounts on the basis of the corresponding account books verified as correct, shall ensure that there be no discrepancy between the accounts and facts, between the accounts and vouchers, among the accounts, and between the accounts and statements; (2) When formulating reports on final accounts, the enterprise shall reasonably confirm and measure all the accounting elements in accordance with the accounting calculation principles and specific accounting approaches on the basis of the actual transaction items and accounting records; (3) The enterprise shall strictly abide by the accounting calculation provisions, shall not cause any false operating achievements and shall not affect the authenticity of the enterprise's reports on final accounts due to its failure to deduct the costs (expenses) that shall be deducted, or failure to amortize costs (expenses) that shall be amortized, or its deducting or amortizing more costs (expenses) than those that shall be deducted or amortized; (4) The enterprise shall not willfully conceal the enterprise's actual operating status by making improper use of the changes in accounting policies or accounting estimates, by making provision for depreciation or by recapturing depreciation; shall not affect the authenticity of the enterprise's reports on final accounts by making provision for secret depreciation; and (5) The enterprise shall objectively reflect the asset loss that has been actually incurred so that it can ensure the authenticity and credibility of the reports on final accounts. Article 9. An enterprise and its subsidiary enterprises of all levels shall, in compliance with the accounting principle of conservatism, reasonably estimate the possible loss of each asset and shall regularly determine and compute the provision for depreciation of each asset according to the standards and approaches to provision for asset depreciation. Article 10. When formulating reports on final accounts, an enterprise and its subsidiary enterprises of all levels shall abide by the accounting principle of comparability, shall keep consistent formulation foundation, principles, basis, approach and accounting standards and indicators from one period to the next, shall ensure the data in the reports on final accounts during each fiscal year be coherent, shall faithfully reflect the enterprise's financial status and variations of operation achievements. Article 11. An enterprise and its subsidiary enterprises of all levels shall implement the same accounting system in the accounting regulations prescribed and required by the state except when it is otherwise provided for by the state. If it is unable to do so due to any special circumstance, it shall report to the SASAC in advance. Article 12. The accounting policies and accounting estimates of an enterprise and its subsidiary enterprises of all levels shall not, once determined, be randomly changed. Where it is necessary to make any important modification due to any special circumstance, the enterprise shall submit a report to the SASAC for archival purposes, in which it shall state the relevant reasons as well. Article 13. When formulating annual reports on final accounts, an enterprise shall not miss any figure under any item in a statement, shall keep the figures under different items in a statement and in different statements coherent to each other, and shall ensure that the accounting relations be correct. CHAPTER III CONSOLIDATION OF STATEMENTS FOR FINAL ACCOUNTS Article 14. A group enterprise shall, in accordance with the relevant provisions of the state on the accounting system, consolidate the annual final accounts of its subsidiary enterprises level by level, shall formulate consolidated statements for the group enterprise's annual reports on final accounts level by level. The scope for the group enterprise's consolidated final accounts statements shall include: (1) All domestic subsidiary enterprises adopting the enterprise accounting system; (2) All overseas subsidiary enterprises (including Hong Kong, Macao, Taiwan Region); (3) All subsidiary public institutions of various types; (4) Various construction projects or construction accounting (including technical reform, same as below); (5) The subsidiary enterprises that adopt financial accounting system in accordance with the relevant provisions; and (6) Other subsidiary economic organizations adopting independent accounting system. Article 15. When formulating consolidated statements for annual final accounts, an enterprise shall fully offset the internal transactions or dealings among the enterprise and its subsidiary enterprises of all levels, shall eliminate the figures of assets, debts, owners equity, incomes, costs and expenses, profits and profit distribution and cash flow related to the indicators of final accounts according to the consolidation standards. Article 16. Where the accounting system adopted by an enterprise's subsidiary enterprises of all levels isn't the same as that adopted by the head office of the enterprise, the head office shall adjust the figures of the final accounts of the head office or those of the subsidiary enterprises according to the unified accounting system of the state when it formulates consolidated statements for final accounts, then it shall start to consolidate the statements for the enterprise's final accounts. Article 17. With regard to a joint subsidiary, the enterprise shall consolidate the final accounts statements by adopting proportionate consolidation approach. With regard to a subsidiary enterprise whose shares are equally held by state investors, the management party under entrustment shall consolidate the final accounts statements according to the regulations on consolidated financial statements or their equity proportions. Article 18. When consolidating the enterprise final accounts statements, if the accounting period or closing date of an overseas subsidiary is not the same as that of the head office, an adjustment shall be made according to the accounting period and closing date of the head office. Where it is unable to make an adjustment due to any special circumstance, the enterprise shall report to the SASAC in advance for archival purposes, and shall give explanations in the notes to the statements. Article 19. Where an enterprise is involved in any transfer of property right within a fiscal year, the consolidation of final accounts shall be determined according to the enterprise's property right relationship on the closing date by the end of a fiscal year. If the property right transfer formalities haven't been gone through by the closing date, the former enterprise shall formulate consolidated final accounts statements. If the property transfer formalities have been completed by the closing date, the enterprise as the transferee shall formulate consolidated final accounts statements. Article 20. In pursuance of the relevant provisions of the state on financial accounting, a subsidiary enterprise that is under any of the following circumstances may not be incorporated into the scope for the annual consolidated final accounts statements, but the enterprise shall submit a document that has legal validity or an economic authentication certification to the SASAC: (1) The subsidiary that has been declared bankruptcy; (2) The subsidiary that has been announced to undergo liquidation according to the bankruptcy procedures,; (3) The subsidiary that has actually closed down, suspended business, been merged or changed business; (4) The subsidiary with more than half of its equity capital held by an enterprise and ready for being sold recently; (5) The non-continuous operating subsidiary with negative owner's equity; or (6) The overseas subsidiary subject to foreign exchange control and any other control of the country or region where it is located. Where the scope for an enterprise's final accounts statements is modified, the modified scope and the modification reasons shall be reported to the SASAC prior to the annual closing date. CHAPTER IV DISCLOSURE OF FINAL ACCOUNTS INFORMATION Article 21. In order to facilitate the understanding of an enterprise's final accounts statements, to know and analyze its asset quality and financial status and to verify its actual operating achievements, the enterprise shall make detailed explanations about and disclose the important contents in the enterprise's final accounts statements and in its consolidated final accounts statements. The information disclosed in the enterprise's final accounts statements shall be authentic, complete and comprehensive. The enterprise shall not conceal any serious violations. Article 22. The notes to an enterprise's final accounts statements shall focus on disclosing the following contents: (1) The main accounting policies, accounting estimates and formulation methods for the consolidated final accounts statements adopted within the reporting period of the enterprise; the content and reasons for the modifications made to the accounting policies within the reporting period, and the affected amount thereby; (2) The scope and basis for the consolidation of final accounts statements, the impact of the assets, liabilities, sales income, realized profits, after-tax profits of an subsidiary not falling within the scope for the consolidated final accounts statement on the enterprise's consolidated final accounts reports shall be listed; (3) The relevant information about the taxes paid by the enterprise within a fiscal year; (4) The information about its controlling subsidiaries and joint ventures; (5) Remarks concerning the items of final accounts statements. In the notes to the consolidated final accounts statements, there shall not only contain remarks concerning the enterprise's final accounts statements, but also notes to the main items of the final accounts of the head office of the enterprise; (6) The impact on the consolidated final accounts statements by the inconsistency between accounting policy of the subsidiary and that of the head office; (7) Disclosure of the relationship of connected parties and other transactions; (8) Contingent items, commitments and items after asset- and-liability statement; (9) Adjustments to serious accounting mistakes; and (10) Other important financial accounting items helpful to understand and analyze the statements, and other special items required by the SASAC. Article 23. An enterprise's annual financial status statement shall focus on explaining the following items: (1) The basic information concerning the production and operations of the enterprise; (2) The information about the implementation of the enterprise's budget, the realized profits, the distribution of profits and the profits and losses of the enterprise; (3) The information about the enterprise's important investments and financing, fund changes and circulation; (4) The information about the enterprise's important restructure and reform; (5) The information about the changes of important property right; (6) Other matters that have important impact on the enterprise's financial status, operating achievements, cash flow and capital preservation; (7) The problems existed in the enterprise's operating management and financial management in the previous year, and the rectification information; (8) The problems existing in the enterprise's operating management and financial management in the current year, and the to-be-taken rectification measures; and (9) Other information. Article 24. The final accounts data provided by an enterprise and its subsidiary enterprises of all levels shall be consistent with the final accounts data submitted to the SASAC and with the disclosed financial information. CHAPTER V FINAL ACCOUNTS AUDIT Article 25. In order to guarantee the authenticity of the enterprises' annual financial status and operating achievements, the SASAC shall, according to the need of the financial supervision work, authorize some accounting firms to audit the enterprises' annual final accounts. Article 26. When determining the to-be-authorized accounting firms, the SASAC shall, according to the principle of "openness, fairness and impartiality", adopt the form of public bid invitations via the SASAC or the form of enterprises' recommendation to the SASAC for examination and approval. With regard to those state holding enterprises, the latter form shall be applicable. Article 27. With regard to an enterprise for whom the SASAC hasn't authorized any accounting firm to audit its annual final accounts for the time being, it shall, according to the principle of "unified organization, standards and management" and upon approval of the SASAC, entrust an accounting firm to audit the annual final accounts of the enterprise and its subsidiary enterprises of all levels by adopting the form of bid invitations in accordance with the relevant provisions. Article 28. The audit on an enterprise's annual final accounts shall include the asset-and-liability statement, the profit and profit distribution statement, the cash flow statement, the statement for the owner's equity changes, related indicators and notes to the statements, and the figures related to other important financial indicators required by the SASAC. With regard to an enterprise that formulates consolidated statements for final accounts, its consolidated statements for final accounts shall be listed into the audit scope. Article 29. An enterprise and its subsidiary enterprises of all levels shall adjust the final accounts according to the audit opinions issued by the accounting firm and the certified public accountants. If the enterprise raises any objection to the audit opinions and fails to adjust the final accounts, it shall submit the final accounts accompanied with explanatory materials to the SASAC. Article 30. According to the relevant provisions, the audit report issued by an accounting firm and the certified public accountants shall disclose the serious accounting matters, such as the enterprise's violation of the regulations of the state on the financial accounting system or failure to adjust the final accounts in accordance with the opinions of the public certified accountants. Article 31. An enterprise shall provide necessary conditions and assistance to the accounting firm and the certified public accountants so as to facilitate their carrying out audit on final accounts, performing necessary audit procedures and obtaining adequate audit proofs. It shall not interfere with the audit practice of the accounting firm and the certified public accountants, so that the independence, objectiveness and impartiality of the audit results may be guaranteed. Article 32. The audit on the annual final accounts of overseas subsidiary enterprises shall be conducted according to the regulations of the country or region where they are located. In order to fit in with the special circumstance of the overseas subsidiary enterprise, the enterprise shall establish and perfect the internal audit system governing overseas subsidiary enterprises and shall issue internal audit report so as to guarantee the authenticity and completeness of the data in final accounts. Article 33. With regard to a subsidiary enterprise involving state security and an entity that needn't be audited by the authorized accounting firm according to the law and regulation of the state, the enterprise shall establish and perfect its internal audit system regarding the annual final accounts, and shall issue the internal audit report so as to guarantee the authenticity and completeness of the data of final accounts. CHAPTER VI THE SUBMISSION OF REPORTS ON FINAL ACCOUNTS Article 34. An enterprise shall be responsible for organizing, gathering, examining, itemizing and consolidating the final accounts reports of its subsidiary enterprises of all levels according to the financial relations or property right relations, and shall, in accordance with the relevant provisions, submit the reports on the enterprise's annual final accounts to the SASAC in time. Article 35. The reports on the annual final accounts submitted by an enterprise shall meet the "unified formulation standards, formats and requirements": (1) Meeting the requirements of the SASAC for the formats of statements and the standards for the indicators; (2) Using unified final accounts statement software to fill out the figures in the final accounts; and (3) Submitting the final accounts statements, notes to the statements, financial status report, audit report, state-owned capital maintenance and appreciation report and other materials in the forms of paper documents and electronic files. Article 36. The reports on an enterprise's final accounts shall be submitted according to the level order as follows: (1) The enterprise group shall submit the reports on the final accounts of the head office and those of each second level subsidiary enterprise in addition to the enterprise's consolidated final accounts reports. The data in the final accounts of a subsidiary enterprise lower than the second level shall be incorporated into the second level subsidiary enterprise for submission. An enterprise group with subsidiary enterprise(s) abroad shall submit each overseas subsidiary enterprise's final accounts reports; (2) An enterprise group with its head office established abroad shall submit the consolidated final accounts as well as the final accounts reports of the head office and those of each subsidiary enterprise; and (3) The submission level order for the final accounts reports of an enterprise group with special levels shall be separately determined by the SASAC. Article 37. The specific contents in an enterprise's final accounts reports shall include the following: (1) An enterprise group (including one with its head office established abroad) shall submit the consolidated final accounts reports (including the notes to the statements, financial status report, explanations about the maintenance and appreciation of state-owned assets and other materials) and the audit report in paper documents and electronic files; (2) An enterprise group and its second level subsidiary enterprises shall submit the final accounts reports (including the notes to the statements, financial status report, explanations about the maintenance and appreciation of state-owned assets and other materials) and the audit report in paper documents and electronic files; and (3) An enterprise group shall submit the third level subsidiary enterprises' annual final accounts statements in electronic files as attachments. Article 38. An enterprise shall submit the final accounts reports to the SASAC in the form of formal documents, which shall include the following contents: (1) The information about the organization of the work of annual final accounts; (2) The information about the changes of the major final accounts figures of the enterprise reflected in different years; (3) The scope for the enterprise's consolidated final accounts; (4) With regard to an enterprise that is given an audit report with a non-standard, no reservation opinion, it shall offer explanations about the relevant matters; and (5) Other relevant information necessary to be explained about. Article 39. An enterprise's final accounts reports shall be affixed with the seal of this enterprise as well as the signatures and seals of the enterprise's legal representative, general accountant or the person-in-charge of the accounting work, and the principal of the accounting institution. The final accounts reports submitted by an enterprise and the attached various materials shall be compiled into books in sequence. If there are many materials, a catalogue shall be made, in which the page number of each material shall be indicated. Article 40. An enterprise's major person-in-charge, general accountant or person-in-charge of the accounting work shall be responsible for the authenticity and completeness of the final accounts formulated by this enterprise. The Accounting firm and the certified public accountants undertaking the audit on the enterprise's final accounts reports shall be responsible for the authenticity and validity of the audit report issued by them. Article 41. After the SASAC has received the final accounts reports of an enterprise, it shall verify and approve the enterprise's assets quality, financial status and operating achievements within the specified time limit, and shall evaluate the performances of the enterprise's person-in-charge, the effectiveness of the enterprise and results of the maintenance and appreciation of state-owned assets of the enterprise on the basis of the final accounts reports upon verification and approval, the relevant measures for which shall be formulated separately. CHAPTER VII PUNISHMENT PROVISIONS Article 42. Where the incomplete contents, insufficient disclosure of information or serious discrepancies among the figures in the final accounts reports of an enterprise caused the false final accounts, or the reports on final accounts don't meet the prescribed requirements, the SASAC shall order this enterprise to reformulate the reports on final accounts and shall criticize it by circulating a notice. Article 43. When formulating the final accounts, any one, who provides any false information, intentionally misses or conceals any facts, but is not suspected of having committed any crime, shall be ordered to get right by the SASAC and be punished in accordance with the Accounting Law of the People's Republic of China, Interim Measures for the Supervision and Administration of State-owned Assets, the Regulations on Enterprises' Financial Accounting Reports and other relevant laws and regulations. If he (she) is suspected of having committed any crime, he (she) shall be transferred to the judicial organ. Article 44. Where an accounting firm and certified public accountants are involved in making false accounts when auditing an enterprise's final accounts or there are serious problems and defects in the procedures, contents and methods of audit, thus an inaccurate audit conclusion is made, the SASAC shall prohibit them from undertaking future audit operations related to enterprises' final accounts, and notify the relevant departments to punish them or punish them jointly with the relevant departments in accordance with law. If any one is suspected of having committed any crime, the SASAC shall transfer him (her) to the judicial organ. Article 45. Where any of related functionaries of the SASAC seeks private interests while gathering, itemizing, examining and managing the enterprises' final accounts information, thus results in any serious faults or divulges any state secrets or enterprise commercial secrets, he (she) shall be given an administrative sanction. If he (she) is suspected of having committed any crime, he (she) shall be transferred to the judicial organ. CHAPTER VIII SUPPLEMENTARY PROVISIONS Article 46. The state-owned assets supervision and regulation institutions of all provinces, autonomous regions, and municipalities directly under the Central Government may formulate specific working rules by referring to the present Measures. Article 47. The present Measures shall be implemented as of the promulgation date. |
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