New Issue of China Briefing: Financial Management

March 31, 2011 Posted by China Briefing Reading Time: 2 minutes

Mar. 31 – The new issue of China Briefing Magazine – out today – is devoted to sound financial management. How to cover such a broad topic in a mere 11 pages? We start with a cover story on the hottest related issue in recent months – financial fraud in the U.S. IPOs of Chinese companies.

That article is written by a recent addition to the Dezan Shira & Associates team: Richard Cant, Director of Corporate Accounting Services. An energetic Australian, Richard helps to walk readers through the legal and sometimes legitimate, but recently severely misused process of reverse mergers, through which over 350 Chinese companies have already gone. This process allows companies to establish private “empty shell” companies in the U.S. and register on U.S. stock exchanges, skipping directly to major boards such as NASDAQ or NYSE because of technical loopholes. The fraud hidden by this financial technique has been widely exposed in various media sources in recent weeks and fit nicely in with this month’s theme of financial management.

The solution to protecting investors in Chinese companies? Due diligence, due diligence, due diligence. We provide our insights into this and into two very China-specific financial management topics: PRC GAAP accounting standards and fapiao.

Finally, after demonstrating how much of the mystery of Chinese accounting books is directly related to tax avoidance, we bring in some regulatory perspective by summarizing updates made by the accounting and legal professionals at Dezan Shira & Associates to The China Tax Guide.

In This Issue:

Financial Fraud in the U.S. IPOs of Chinese Companies
Better Financial Due Diligence
PRC GAAP, Fapiao and Sound Financial Management
Common Inaccuracies in Chinese Balance Sheets
The China Tax Guide: New Updates

This issue of China Briefing is available from the Asia Briefing Bookstore, priced at US$10.

Dezan Shira & Associates is a boutique professional services firm providing foreign direct investment business advisory, tax, accounting, payroll and due diligence services for multinational clients in China. For more information, please contact info@dezshira.com, visit www.dezshira.com, or download the firm’s brochure here.

We use this issue of China Briefing to take a look at several aspects of M&As that foreign-invested enterprises should be aware of when investing in China

Chinese Companies in U.S. Reverse Mergers ‘Valueless’

The Importance of Chinese Fapiaos When Doing Your Accounts

The China Due Diligence Series

Part One: China Due Diligence You Can Conduct Yourself

Part Two: China Operational Due Diligence

Part Three: Analyzing Chinese Financial Reporting

Part Four: Kicking a China Business’ Tires – The Checklist