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In this issue of China Briefing:

• China’s Annual Audit and Compliance Requirements
• The Annual Audit Compliance Process for FIEs in China
• Q&A: The Benefits of Starting Your China Audit Early

The beginning of the year is invariably a hectic time for foreign companies in China. Annual licenses must be renewed, new regulations often come into effect, and, perhaps most importantly, firms must prepare their annual audit accounts from the previous year.

All foreign invested entities in China are required to fully comply with the country’s statutory annual audit procedures. While the way in which China’s audit process functions is now more closely aligned with Western practices than in the past, there are still a number of differences and idiosyncrasies that can quite easily trip up a foreign firm.

New audit procedures are also commonly introduced in China. A number of new standards have been implemented in the last two years alone, meaning that even companies with long established branches here will have to keep abreast of the latest changes.

In this issue of China Briefing, we provide a comprehensive analysis of the various annual compliance procedures that foreign invested enterprises in China will have to follow, including wholly-foreign owned enterprises, joint ventures, foreign-invested commercial enterprises, and representative offices. We include a step-by-step guide to these procedures, list out the annual compliance timeline, detail the latest changes to China’s standards, and finally explain why China’s audit should be started as early as possible.