Course Title : Business Law, Accounting and Taxation Systems in China

Course Code : FB8212

Prerequisites : Financial Reporting and Analysis for Decision Making

Precursors : Nil

Teaching Pattern : Seminar

Total Hours : 40 (40)

(Group Size)

Aim and Objectives

Aims

To provide an overview of business law and the accounting and taxation systems in the People's Republic of China in order to understand the legal implications in business transactions particularly as they may relate to accounting and taxation and their effects on corporate financial performance and external financial reporting.

Objectives

On completion of the course, participants will understand:

(a) the legal environment in China which has direct relevance to government regulation of business and the legal implications of business situations;

(b) the underlying principles of law and regulatory framework of accounting and taxation in China;

(c) the major financial accounting issues in China as they affect external financial reporting;

(d) the taxation system and the various types of taxes in China;

(e) the differences between business law and accounting and taxation systems in China and those in Hong Kong.

Syllabus

The Legal System of China

(a) The nature and social structure of the country

(b) The basic legal system: the Constitution

the National People's Congress system

the government system (central and local)

the people's court system

(c) The economic reform and the establishment of a socialist market economy

Contract Law of China

(a) General Principles of Civil Law

(b) Economic Contract Law

(c) Law on Economic Contracts Involving Foreign Interests

(d) Technology Contract Law

(e) Uniformed Contract Law to be Adopted

Laws Governing Business Organizations

(a) State-owned Enterprise Law

(b) Foreign Investment Enterprise Law

(c) Company Law

Laws concerning Financial System

(a) Banking Law: Law of People's Bank and Commercial Bank Law

(b) Law of Negotiable Instrument

(c) Securities Market Regulations

Financial Accounting Systems in China

(a) Accounting practices under the current accounting regulations

(b) Changes in accounting practice under the forthcoming accounting standards

(c) Special accounting issues in China

(d) Difference between accounting standards in Hong Kong and China

Taxation in China

(a) Objectives and principles of the regulatory framework of taxation in China and its administration

(b) Different taxes (value-added, business, consumption and income taxes) for various types of enterprises

(c) Tax planning for enterprises having foreign investments

Legal and Accounting Profession in China

(a) Structure of legal and accounting professions in China

(b) Legal and CPA firms in China and their services

Teaching Methods

The course will be delivered in seminars involving interactive lectures and discussions. Participant presentations of literature reviews and case studies will also be used. In view of the multi-disciplinary nature of the course, joint teaching by Law and Accountancy departments is necessary.

Assessment

Examination : 30% (one 3-hour examination)

Cases/Projects : 40%

Participation : 30%

Booklist

Essential Reading

Tang, Y.W., Chow, L., and Cooper, B.J., Accounting and Finance in China, 3rd edition, 1996, Law and Tax, Asia

The Accounting and Taxation Laws and Regulations published by the PRC.

Wang Chenguang and Zhang Xian Chu (ed.): Introduction to Chinese Law, (Sweet & Maxwell 1997)

Supplementary Reading

Chang X., Accounting for Joint Ventures with Chinese and Foreign Investments, 1993, Xiamen University Press

Liu K.C. And Zhang W.G., Contemporary Accounting Issues in China: An Analytical Approach, 1996, Prentice Hall (Singapore)

A H Y Chen: An Introduction to the Legal System of the People' Republic of China (Butterworths 1992)

Guiguo Wang: Way's Business Law of China (Butterworths 1996)

Streng & Wilcock (ed): Doing Business in China (Matthew Bender, 1990, updated through 1996)

Sally A Harpole (ed): China Business Law Gudie, (CCH International, updated through 1995)