Study On Scope Of Consolidation Report

This thesis was analyzed the definition of scope of consolidationfinancial report from either the accounting principal <China AccountingStandard No.33–Consolidation> or current practice.Consolidation report stands to those two or above legal entities becomea group as one accounting entity due to control or under-control is existed.Consolidation report reflects this accounting entity’s entire fiancé condition,operating result and cash flow statement. Accounting entity is organized byseveral legal entities and is treat as a nominal unit. Ultimate holding companyresponsible of prepare the consolidation report. PRC accounting standardCAS33was worked out base on entity theory which control is the substantial.But there still exist some arguments and not considered factors cause a bigproblem and was used by some commercial group to amend the financereport and cheated investors and share holders. The main purpose is to obtainprojects or raise funds. This article draw on actual cases with Chinese andforeign accounting standards of how to identify the control to improve thesubstance of provisions.