Wang Jun - Accounting with Heart. Chinas Role in International Finance and Business

Copyright 2010 Wang Jun

Published in 2010 by John Wiley & Sons (Asia) Pte. Ltd.

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Library of Congress Cataloging-in-Publication Data

ISBN 978-0-470-82570-9 (Paperback)

ISBN 978-0-470-82601-0 (Hardback)

Typeset in 10.5/13pt Sabon-Roman by Thomson Digital

10 9 8 7 6 5 4 3 2 1

FOREWORD

On behalf of the Association of Chartered Certified Accountants (ACCA), I am delighted to congratulate Dr. Wang Jun on his first international publication, whose inspiring writings deserve a wider audience.

As Vice Minister of Finance, Wang Jun has played an historic part in the development of the Chinese accountancy profession. In 1988, he took a leading role in the creation of the Chinese Institute of Certified Public Accountants (CICPA), marking the beginning of a new era for the nations profession. Since then, through promoting convergence between Chinese and international accounting standards, Wang Jun has enabled the accountancy profession in China to take its rightful place on the global stage. By advocating the importance of sharing a common understanding of accounting language and principles, he has made a profound contribution to Chinas international standing and the success and stability of its economy.

In 2008, ACCA was honored to pay tribute to two decades of remarkable achievement by CICPA and pledge its continued support for the Chinese profession, the Ministry of Finance and influential leaders such as Wang Jun under the theme of Partners in Progress. To coincide with the publication of this volume, ACCA is recognizing Wang Juns personal contribution to this effort with a unique Outstanding Innovation and Leadership Award.

A thinker as well as a man of action, Wang Jun is rightly celebrated across China for the range of his vision and the poetry of his words.

In the western world, the examination of business and finance can often be a dry exercise. Wang Jun shows, through this extraordinary collection of writings, both the breadth of his world view and the connections which surely exist between finance, the arts, spirituality and culture. His is a visionary voice, which takes the reader beyond the normal realm of finance discourse.

As the global economy develops, new models for growth and economic sustainability have emerged. Chinas astonishing success is an outstanding example of what is a new world order. In understanding the contribution that Chinas accounting profession has made to its extraordinary economic progress, Wan Juns writings are a fascinating place to begin.

Helen Brand

Chief Executive

Association of Chartered Certified Accountants

Wang Jun, in his role as Chinas Vice Minister of Finance in recent years and as Secretary-General of the China Accounting Standards Committee, has been at the center of his countrys remarkable advances in financial reporting and accounting.

It has been my pleasure, as Chairman of the International Accounting Standards Board (IASB), to get to know Wang Jun both personally and professionally.

Serious contacts between our two organizations began over four years ago. By that time China had already embarked on a path towards convergence of its own accounting standards for business enterprises and the IASBs International Financial Reporting Standards (IFRSs). In the previous year China had published exposure drafts of a general basic standard and 20 specific standards and had begun a review of its existing 16 standards. A series of meetings between IASB staff and the Ministry of Finance was followed by a high level meeting in Beijing, co-chaired by Wang Jun and myself, in November 2005. The meeting was attended by leading Chinese officials and by three other IASB members and two IASB directors. At the meeting the IASB team applauded and expressed our sincere admiration for the enormous progress already made towards convergence, and agreed to assist China in its work on convergence. For its part China agreed to assist the IASB in researching and developing recommendations on a number of accounting issues that were of particular relevance to that countrys unique circumstances and environment.

I am happy to record that since that meeting the IASB has continued to strengthen its ties with China and to move forward in a spirit of cooperation with the Chinese accounting community.

As Wang Jun appreciates very well, accounting standards are only one of the essential elements in establishing a modern economy within the global marketplace. Standards will have no effect unless they have the support and understanding of a well-trained accounting profession, inspired by the highest professional ideals and skills and able to ensure that standards are applied thoroughly and consistently. I have observed with admiration the energy and determination with which the Ministry of Finance, under Wang Juns wise leadership, has promoted the development of such a cadre of professionals.

If China, rapidly becoming one of the worlds leading economies, is now equipped with the accounting tools and skills to take its rightful place on the global business stage, it is largely a tribute to the vision and leadership of my colleague Wang Jun. I am delighted that the publication of this book will enable an international audience to hear him speak for himself.

David Tweedie

Chairman

International Accounting Standards Board

INTRODUCTION

In recent years, the Chinese accountancy profession has experienced an unprecedented period of great growth, change and development as it serves better the requirements of an era of reform and opening up. An old Chinese saying, The way to govern is through winning people over, speaks of the urgent need to build accounting talent that is globally-minded, has a firm grip on the law, and is innovative, in order to promote the cause of Chinas accounting reform and development strongly and continually.