Annual Audit and Compliance in China: Prepare for 2021
Published: December 2020The start of a new year tends to be a hectic time for foreign companies in China. During this period, businesses must also begin to prepare their annual statutory audit – if they have not started to do so already. In this issue of China Briefing magazine, we walk foreign businesses through the annual audit and compliance process from start to finish. We begin by exploring the significance of annual audit on FIEs and strategies on how to make the most out of the annual audit. Then, we offer a comprehensive step-by-step guide to completing the annual compliance process and highlight the changes in the past year. Finally, we provide a comprehensive introduction to the new China Accounting Standards that will affect most businesses, starting January 1, 2021.
The start of a new year can be a hectic time for foreign companies in China. Businesses must renew their annual licenses and adapt to new laws and regulations that are coming into effect, all while managing the workflow interruptions of the holiday season and upcoming Chinese New Year celebrations.
During this period, companies must also begin to prepare for the annual audit – if they have not started to do so already. To meet the various compliance deadlines scattered throughout the year, they need to begin the long and complicated process of financial reporting, months in advance. If companies fail to comply, they risk being hit with deteriorating credit, additional fines and penalties, and might not be able to remit their profits overseas.
Beyond facilitating compliance requirements, however, the annual audit presents an opportunity for the entity to conduct a deep dive into their finances and internal operations. A comprehensive audit might reveal unexpected irregularities or suboptimal business practices, or discover eligibility for tax incentives that had not previously been captured. In addition, foreign invested enterprises can get themselves ready for the upcoming new China Accounting Standards.
In this issue of China Briefing magazine, we walk foreign businesses through the annual audit and compliance process from start to finish. We begin by exploring the significance of annual audit on FIEs and strategies on how to make the most out of the annual audit. Then, we offer a comprehensive step-by-step guide to completing the annual compliance process and highlight the changes in the past year. Finally, we provide a comprehensive introduction to the new China Accounting Standards that will affect most businesses, starting January 1, 2021.
We hope this magazine helps your business add value to its annual statutory audit and compliance reporting in China.
In this Issue:
- Annual Audit in China: Why it’s Important and How to Get Started
- Annual Compliance Requirements and Procedures: What’s New
- The New China Accounting Standards: Get Ready for 2021