Bridging the Gap: A Comparison of the Developmental Histories and Modern Financial Statements of Chinese and American Accounting

Date of Submission


Document Type


Degree Name

Master of Science in Accounting




Robert McDonald


Accounting --United States, Accounting --China.

Call No. at the Univ. of New Haven Library

AS 36 .N29 Acc. 1995 no.3


For historical reasons, the Chinese and American accounting systems are very different. Today, the world is rapidly globalizing, and one significant portion of this trend is the fact that both Chinese enterprises and American investors are trying to form joint ventures. In the process, they are facing serious financial difficulties, which arise in part from a lack of understanding of the differences and similarities across the two accounting systems. Hence, learning such information has become an imperative.

This study begins to explore such information first through a portrayal of the historical differences and similarities inherent in both accounting systems. It then moves to focus on gaining an understanding of the differences and similarities between Chinese and American financial statement analysis. I focus on financial statement analysis not because it represents merely a part of both accounting systems, but because it constitutes a major part of them.

For the Chinese government and enterprises, studying the American system, which is far more advanced, assists them in moving forward through an absorption of the newest technology and means of analysis. On the other hand, for American investors, understanding the difference between the Chinese and American accounting systems not only increases their knowledge of their trading partner's financial condition, but most importantly helps them to make the right choices, and to choose the right partners. The final and most significant result of studies like this one, however, is an enhanced mutual understanding between American and Chinese accountants, managers, joint-venture partners, and all other members across the boundaries of the international business world.