1.0 Introduction
This report talks about china s accounting systems and how it has developed and changed continuously till present. It looks into the history of Chinese accounting, followed by explaining how the institutional factors have had an impact and is backed up by 2 theorist, Hofestede and Grays model. It identifies the significant changes that occurred during its journey in adapting to the IFRS standards starting from 1949. Culture is a main aspect of china and has been incorporated into its accounting systems as well. To conclude it explains future problems that may arise and whether or not china will fully adapt to the IFRS system.

2.0 Brief history of accounting
Previously there was no real accounting system in china with the exception of providing financial reports, therefore the Chinese government wanted to implement an accounting system. In 1949 the people Republic of China (PRC) a communist party came into power and adopted a communist accounting approach from Russia to achieve socio economic development without the reliance on developed nations.
2.1 Significant changes that have taken place
2.2 Great Leap Forward
The regime of the Great Leap Forward 1958 – 59 was an effort to strengthen china’s economy, and catch up with the western world, but ended during the Cultural Revolution. A series of natural disasters like shortage of water, starvation led to the worst period in china’s history.
2.3 Cultural Revolution
However the Cultural Revolution 1966 – 76 was aimed at maintaining the socialist nature and removing the bureaucratic structure, and forcing manual labour, resulting in a major collapse of the economy. Nevertheless there was no development of accounting system until the 1980s.
2.4 Economic Reform
Chinas economic reform began in 1979 which saw its economy develop dramatically and seen a growth in its GDP of 9.5 % per