Phil Hancock and Greg Tower
This chapter deals with accounting as an aspect of capital market’s activities in Asian countries. It outlines the financial reporting rules which apply in some major Asian countries and financial centres. The People’s Republic of China (PRC), Taiwan, Hong Kong and Singapore share a Chinese heritage, but the latter two, as well as Malaysia, are also strongly influenced by British rules, especially in regard to company law. Indonesia is uniquely influenced by Dutch legal traditions.
The objective of this chapter is to provide an overview of the financial reporting requirements that apply in Indonesia, Singapore, Hong Kong, Malaysia, the People’s Republic of China and Taiwan. The implications of corporation law, stock exchange and the accounting profession’s standards for financial reporting are discussed. While the chapter outlines the financial reporting requirements in each of these countries, it is not possible to provide more specific details on accounting regulation in each industry/ sector in each country. The fast changing regulatory environment of East Asia has meant that accounting standards are being reviewed and redefined at a fast pace. As a result, practitioners will need to obtain up-to-date case-specific information from the host country in which they operate or intend to operate.
Multinational companies are caught between the host country’s desire for more information and home government reporting requirements. Gray (1981) notes the perception of some users and multilateral organisations such as the United Nations, Organisation for Economic and Co-operative Development, the European Community, International Monetary Fund (and others) that market forces cannot be relied upon to ensure sufficient comparable information about multinationals. Accounting regulation is offered as a remedy (Cooper and Keim 1983).