The European Commission (EC) is to approve a set of Chinese accounting standards (CAS) in line with those used in EU nations by the end of 2008, a senior EC official has said.
Charlie McCreevy, Commissioner for the Internal Market and Services, said Tuesday at a press conference during his two-day visit to China that the EC had set a timetable to decide on the CAS equivalent to the international financial reporting standards (IFRS) used by all EU member states.
China would be the fourth country after the United States, Japan and Canada, to accounting standards equivalent to those in the EU.
The EU started using the IFRS for all listed companies in its 27 member states in 2005. McCreevy said if the CAS was taken as the equivalent of the IFRS, then Chinese companies listed in European stock markets would have no need to change their annual financial reports.
China adopted new CAS for all listed companies and auditing standards for accounting firms in January, marking substantial progress in convergence with the IFRS and the international standards on auditing.
In talks with Chinese Vice Minister of Finance Wang Jun, whose department oversees accounting affairs, on Monday, McCreevy stressed the EC's strong support for convergence between the IFRS and the CAS.
He welcomed China's progress in developing accounting standards and contributing to international convergence, and encouraged China to continue the convergence process.
McCreevy and Wang agreed that consistent application of accounting standards needed proper enforcement systems and education and training.
They agreed both sides should continue to hold regular meetings to exchange views on international accounting convergence and equivalence.
McCreevy, on his second visit to China, came to discuss strengthening regulatory cooperation in key policy areas, including financial services, accounting and auditing, securities and asset management, public procurement and intellectual property rights.
He held meetings with Minister of Finance Jin Renqing, People's Bank of China governor Zhou Xiaochuan, president of the planned Foreign Exchange Reserves Management Company Lou Jiwei, and China Securities Regulatory Commission chairman Shang Fulin.