China Issues Legislation for Internal Control Framework

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Nov. 4 – China has issued legislation detailing the comprehensive requirements needed for a company’s internal control framework called the Basic Standard for Enterprise Internal Control.

The legislation was launched by the Chinese Ministry of Finance, the National Audit Office, and all three major industry regulators: the China Securities Regulatory Commission, the China Banking Regulatory Commission, and the China Insurance Regulatory Commission.

It is effective beginning July 1, 2009 and will be initially enforced among listed companies while also encouraging adoption by other large and medium size unlisted companies.

In addition to the Basic Standard for Enterprise Internal Control, three guidance documents were also issued for public consultation.

A copy of the overview of key requirements of the Basic Standard for Enterprise Internal Control, plus the Circular and the draft supporting guidance documents can be found on the PricewaterhouseCoopers website.