Study On The Scope Of Consolidated Financial Statements In China

As one of the four major problems of financial accounting, the consolidated financialstatements has always been the difficulty and focus of contemporary accounting research.The content and quality of the information provided by consolidated financial statements aredirectly influenced by consolidation scope, so accurate determination of consolidation scopeis the key premise for preparing consolidated financial statements. Due to the complexity andvariety of the consolidated financial statements, the consolidation scope determination mustbe supplemented and revised constantly with the development of economy and the emergenceof new problems. The2008global financial crisis has exposed many loopholes of accountingstandards, especially the consolidated accounting standards. In response to the crisis, theInternational Accounting Standards Board (IASB) and the American Financial AccountingStandards Board (FASB) issued new accounting standards and amended the consolidationscope largely. Whether these changes have reference significance to our country, and whatnew requirements our actual conditions has raised to consolidation scope, are the maincontent of my study.This paper takes consolidation scope as its research object. Firstly, through analysis oftheories on consolidated financial statements, it sets out the basic framework of consolidationscope determination, basing on the entity theory and adhering to the principle of substanceover form. Then, based on the relevant regulations in<Accounting Standard for BusinessEnterprises No.33-Consolidated Financial Statements>(CAS33)and its application guide, theauthor did some statistical analysis about the consolidation scope determination on the2012annual report of396listed companies in Shenzhen Stock Exchange and proposed thedeficiencies of CAS33and its guide in practical application. Finally, combining with caseanalysis and standard comparison, the author put forward corresponding suggestions andcountermeasures. Through the analysis of the consolidation scope,this paper proposed theimprovement to the definition of control, concrete criterion of substantial control and itsdetermination method, principal-agent relationship and the agent’s determination and theparent company that don’t prepare consolidated financial statements. Through the researchand analysis of the scope of consolidated financial statements, we expect the theory of consolidated financial statements for further improvement and development, to promote thequality of accounting information in consolidated financial statements.