On 28 June 2008, five authorities including China’s Ministry of Finance, the China Securities Regulatory Commission, the China Banking Regulatory Commission, the State Auditing Administration, and the China Insurance Regulatory Commission issued the Basic Regulations for Enterprise Internal Control (the “Basic Regulations”), which will take effect on 1 July 2008.
Pursuant to the Basic Regulations, directory boards, supervisory boards, managers and all enterprise staff should strictly implement their internal control systems. Enterprises are required to focus on promoting their developmental strategies on the basis of ensuring the legality of their management, security of assets and completeness and accuracy of financial statements and relevant information.
The Basic Regulations requires enterprises to conduct self-evaluations of their internal control systems. Enterprises can appoint accounting firms to audit the effectiveness of their internal control systems and issue an audit report.
For more information, please refer to http://www.gov.cn/gzdt/2008-06/28/content_1030188.htm. The full text of the Basic Regulations can be found at http://www.casc.gov.cn/wjk/200703/0000000000000000000002.doc.