Accounting Reporting Criteria

1. Regulatory Environment

2. Foreign currency

3. GAAP

WWTC

Product Safety

International Laws and Regulations

China Regulations

International Trade

Buying products

cheap oversee and

selling ,for big profit

in the United States

Make my money clean

People’s Republic of China

General Accepted Accounting

Principles

-Rooted in Chinese Accounting

Law (the highest authority in

Chinese accounting)

-Ministry of Finance

-Moving toward international IFRS

principles

General

Accepted

Accounting

Principles

accommodates variation in

applied accounting methods

as long as the methods

generally adhere to a set of

principles

The Hartcourt Companies

Inc. is a Chinese distributor

of computer hardware and

peripherals made by

Samsung Electronics, including

computer display,

monitors, notebook

computers, and

other digital devices.

U.S.

GAAP framework

Of accounting

standards

Dell, Inc. engages in the

design, development, manufac

ture, marketing, sale, and

support of computer systems

-Remarkable growth in economy since 1979

-New accounting system based on International Accounting Standards

-PRC GAAP accounting standards rooted in Chinese accounting Law

-Role of Minister of Finance

-Reporting

-Economy Change

Both use principle-based standards accompanied by detailed

application guidance

Both use the historical cost of property, plant, and equipment on

the balance sheet

PRC GAAP does not recognize items that do not satisfy the

definition of an asset, liability, or equity on the balance sheet.

Differences in tax rules

Cultural differences that impact accounting reporting

The quality of financial statements, infrastructure and business processes will

be lower than that to which Western investors are accustomed. In

addition, they frequently contain errors which first need to be corrected.

Low level of transparency in financial information

Audited financial statements are typically not reliable from a U.S. GAAP

perspective

Extent of related-party transactions is usually extensive and inadequately

disclosed (American public companies are required to disclose all

transactions with related parties such as executives, associates and their

family members in their annual 10-K report)

Disclosure of contingent liabilities rarely disclosed

~Haagmans, S.(2006)~

1. Regulatory Environment

2. Foreign currency

3. GAAP

Haagmans, S. (2006) Due Diligence Factors of success in China. Retrieved July 6, 2008, from Web site: http://www.eycom.ch/publications/items/china/aabs_due_diligence factors/en.pdf

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