What are the auditing requirements in China?
In Western countries limited liability companies are generally subject to an annual audit carried out by independent external auditors whose role is to express an objective opinion on the truthfulness and fairness of the financial statements. In China, auditing is not a legal requirement but is required under the regulations. Prior to the introduction of the ASBE, the primary objective of auditing in China was to carry out inspection on the financial records of a business to ascertain their accuracy and legality (ie. whether the transactions conducted complied with relevant State laws and regulations). Auditors in China are concerned with protecting the legal interests of the company as well as the interests of the State. Only with the implementation of the ASBE were the concepts of true and fair presentation introduced. Prior to 2000 financial statements of state-owned enterprises were not required to be audited annually by independent auditors, but periodical or social audits conduct
