Every company in China should maintain sufficient accounting records regarding their income and expenditure to enable its taxable profits to be readily determined. In practice, all documents related to business operations of the company including bank statements, sales and purchase invoices, receipts and invoices for expenses and all contracts signed by the company should be properly kept. Proper management account including balance sheet,profits and loss account and general ledger should be prepared on a monthly basis in accordance with “Accounting Law of the People’s Republic of China”, “Enterprise Accounting Standards” and “Enterprise Accounting Principles”.
FIEs are required to compile audited financial statements at the end of each fiscal year in accordance with relevant laws, regulations and administrative requirements. The audited financial statements should be prepared by a Certified Public Accountant in China. The State Tax Bureau requires all enterprises to provide a verification report of the annual enterprise income tax on a yearly basis.
The accounting records of a company required to be retained for at least 15 years.