What Are Accounting Procedures?

Accounting procedures are a specific set of accounting methods and work sequences used in accordance with the requirements of accounting systems or accounting standards. For example, in the process of accounting operations, document delivery procedures, book registration procedures, procedures for preparing statements, etc. When controlling the production process, procedures for borrowing, warehousing, and acceptance in material procurement; procedures for picking, returning, and finished products in production during production; procedures for inventory and inventory of materials, finished products, and equipment. Working strictly in accordance with accounting procedures can improve work efficiency, strengthen supervision and control, and prevent errors and fraud. ^[1]

Accounting procedures

1. After the economic business occurs,

Accounting justice should be implemented in all aspects of the accounting field, and the lack of accounting justice, especially procedural justice, can lead to very serious consequences. At present, the accounting injustice caused by the lack of procedural justice in the accounting field can be summarized as the following three links: the establishment of accounting standards, the accounting link (ie, the generation of accounting information), the auditing and disclosure of accounting information.

Lack of justice in the formulation of accounting standards

On February 15, 2006, the Ministry of Finance promulgated a basic standard and 38 specific accounting standards, which will be implemented in the scope of listed companies across the country from January 1, 2007. This is a major step in the convergence of China and international accounting standards, and it has a landmark significance in the history of China's accounting development.

In terms of the rule-making process, considerable progress has been made in drawing on the experience and practices of the United States and the International Accounting Standards Board. However, the deficiencies in the procedures still need to be improved. It took only a short period of 8 months from the Ministry of Finance's announcement of the draft of the Basic Accounting Standards for Business Enterprises to the formal release of a Basic Standard and 38 specific standards. From the perspective of the program, there are the following deficiencies:

1. Insufficient participation of various stakeholders in the development of the accounting system

The formulation of any policy should be a multi-level and multi-level game process among stakeholders, as is the case with accounting standards. From the perspective of a fair and sufficient game, only if the sufficient game is satisfied in time and space, and all parties fully express their "appeals" for interests, can the standards be scientific, effective, and fair, at least in the process of achieving the standards in the process Fairness of all stakeholders. The participation of various stakeholders in the process of China's accounting standards is usually in the form of a draft of comments, but the lack of institutional requirements and processes for soliciting opinions has limited the full solicitation of opinions from various stakeholders.

Because the biggest impact of the accounting system is that it will bring direct economic consequences to the enterprise, therefore, whether the public, especially various stakeholders, have sufficient opportunities for participation and whether they have a positive sense of participation is on the one hand important in determining the quality of accounting standards. Factors; on the other hand, it is also a key factor that determines whether accounting standards can be strictly enforced. If the process of making accounting standards fails to enable all stakeholders to participate fully and give them an opportunity to comment, the inadequacy of this procedure will procedurally create an unfair feeling for all stakeholders, which is a fairness principle. Violation. The result of not respecting their opinions in the process of standard setting will inevitably lead them to not respect the standard itself. All stakeholders may vote with their feet, fail to implement accounting standards or do not strictly implement accounting standards.

2. The procedures of the standard setting process are not transparent, and the stakeholders are not aware of the setting process and procedures

Transparency in the norm-setting phase is an important step to ensure that people, especially stakeholders, understand the norm-setting process and confirm the fairness of the process.

The lack of transparency in the norm-setting process cannot increase public acceptance. Judging from the four stages of China's current accounting standards development process, except for the last stage where the public can see the official release of the standards, the first three stages are inadequate or even undisclosed. The public can only occasionally learn what accounting standards China will formulate from relevant leaders speeches. As for the research progress and drafting of the standards, there are even some accounting standards that have failed in the process, and the public has no idea. Due to the lack of openness in the formulation process, the public cannot express their opinions during the drafting of the first draft of accounting standards. Even if the draft of the comments is finally seen, they are often caught off guard because they have not been prepared in advance. The conditions cannot be met. At the same time, the formulation of accounting standards did not schedule public hearings and voting processes. The absence of these procedures is a serious flaw that affects the fairness of accounting standards procedures.

Lack of justice in accounting

In recent years, there has been a large and continuous distortion of accounting information at home and abroad, mainly due to the failure of accounting personnel to comply with accounting professional ethics, falsification in the accounting process, and failure to comply with accounting standards and accounting systems, which has failed to truly reflect the fairness of accounting. Ethical attributes. The distortion of accounting information or the results of fraudulent accounting will cause some people to benefit and others to suffer. This is a typical manifestation of accounting injustice. The unfair distribution form has been strongly condemned, resulting in the instability of social order. In accounting fraud cases, accounting has become a tool for a small number of people to manipulate the distribution of benefits. Among them, there are many illegal means such as bribery and manipulation of benefits, which has led to the injustice of distribution of benefits and greatly disrupted the normal economic order of society. Such cases are endless. For example, Yinguangxia Company used fictional transaction objects, forged sales contracts, forged export declarations, forged special value-added tax invoices, forged tax-exempt documents and forged financial bills. Fictitious huge profits amounted to 745 million yuan; Hongguang Industrial made fictitious product sales and product inventory in the prospectus, and increased 157 million yuan in profit; etc. These are typical examples of serious socio-economic consequences of distortion of accounting information.

Lack of justice in auditing and disclosure of accounting information

The fairness of accounting information disclosure should include two meanings: first, the company's accounting information must be fully, truthfully, and timely disclosed; second, this information must be disclosed fairly to all information users.

In view of the current problems, the lack of timeliness of accounting information disclosure is a prominent manifestation of unfair accounting information. Judging from the current disclosure of accounting information of Chinese listed companies, there is a serious lag in the disclosure of various accounting information. In the time of disclosure, different listed companies have intentionally made early or delayed disclosure. The main manifestations are: companies with good performance tend to announce earlier, while those with poor performance postpone the announcement. In general, companies tend to announce favorable news first. This is inconsistent with the principle of accounting fairness. Information users cannot obtain information fairly, which leads to the proliferation of insider trading and harms the interests of investors. Therefore, there should be clear regulations on the release of interim and annual reports by companies to ensure that their procedures are fair.

According to statistics from the China Securities Regulatory Commission, every year, many companies deliberately delay the announcement of major events, play poorly, and encourage a large number of insider trading.

For the realization of the fairness of accounting procedures, scholars in accounting circles have conducted many useful discussions. From the above discussion, it is not difficult to see that the implementation of the concept of procedural justice is an effective way to ensure the realization of accounting justice. Aiming at the problem of lack of accounting fairness, this paper proposes procedural safeguards to categorize and manage the lack of accounting fairness from the perspective of the procedure in accordance with the core idea of procedural justice. That is to discuss the accounting process justice and its realization ways from the three aspects of the formulation of accounting standards, the generation of accounting information, and the auditing and disclosure of accounting information. Ensuring the fairness of the above links is a necessary and inadequate condition for achieving comprehensive accounting fairness.

Procedural justice in the process of setting accounting standards

Accounting standards are a kind of technical specifications, the purpose of which is to improve the quality of accounting information through the orderly, systematic, and internal consistency of accounting standards and the consistency with objective reality. For the formulation of various policies in human society, fairness and justice are a principle that has been followed by people for a long time, as is the formulation of accounting standards.

1. Procedural concept in the formulation of accounting standards

In an uncertain environment, people cannot accurately predict the future, and therefore cannot take action in a substantially rational way. They can only rely on a rational procedure to reduce the degree of uncertainty. When people negotiate and make contractual arrangements for the establishment of accounting standards, the actual concern is not how perfect this arrangement can achieve (the goal), but that this arrangement is commonly recognized by most people and follows everyone's Acceptable decision rules and procedures, that is, the process of formulating accounting standards should be acceptable to all parties. The fairness of accounting information is not reflected in how "fair" it is, but whether it is based on the country. The generally accepted accounting rules and their contract-making power arrangements are processed, and if so, they are "fair". Therefore, the procedure has independent value, and the idea of procedure supremacy should be established.

As for the application of the accounting concept of the procedural concept, the fair procedure promoted by the International Accounting Standards Board is a typical example of practical verification. The procedural fairness theory is a set of complete, sufficient, rigorous, and stable procedures followed in the formulation of accounting standards, making accounting standards development a transparent activity, and its purpose is to ensure the independence, fairness, and openness of accounting standards . Allowing the procedure to proceed in accordance with the rational principle will make people with rational abilities understand the procedure and the procedure results more, and have a feeling of being persuaded rather than forced, and thus more willing to accept the procedure results. In fact, this is the core of procedural fairness.

The mechanism of application of the procedural concept to the formulation of accounting standards is to listen and inform widely. It mainly includes three aspects: prerequisites-independence of the norm-setting body; basic conditions-openness of the norm-setting process; essential requirements-extensive participation in norm-setting. In this way, the International Accounting Standards Board guarantees the effective implementation of its due process, thereby making international accounting standards more authentic and fair, and promoting the recognition of the international community.

In this regard, the procedural philosophy of the International Accounting Standards Board is undoubtedly successful, and it has a good reference for our standard setting.

2. Procedural justice in the process of setting accounting standards

China has formed a model suitable for its own national conditions in terms of accounting standard-setting institutions and procedures, and this model has been highly recognized by all sectors of society, but at the same time there is a certain gap from people's expectations. In order to further enhance the fairness, openness and democratization of the formulation of accounting standards, to improve the authenticity of accounting information from the perspective of procedural rationality, and to realize the fair values of accounting, the following principles of procedural justice should be fulfilled:

(1) Increase the participation of people from all walks of life and increase their participation. Widely involve people from all walks of life to participate in the norm-setting process. Based on the concept of serving the main users of financial accounting information (national functional departments, banks, professional investors, and business managers), adding representatives to the advisory committee, so that they can fully express their opinions when formulating standards.

(2) Multi-channel dissemination of comments and official drafts. Use advanced concepts, such as the Internet as a communication channel, to take advantage of the rapid spread of the Internet. According to a survey conducted by Hao Dongdong and Yang Zhiqiang (2003), among the reasons for not submitting amendments to the ED, 41.27% did not know the feedback channels of the ED, and considered that it was not useful to comment on the ED Accounted for 44.44%. It can be seen that we need to unblock the feedback channels of the draft for comment. For example, to display the draft of the accounting standard for comment and its final deadline on the prominent homepage of the website of the Accounting Standards Committee. In mainstream economic and financial media (such as China Business News, The Economic Observer, etc.) published solicitation drafts and feedback methods on a large scale, allowing people who are concerned about accounting standards to actively participate in discussions. Regarding the discussion method of the consultation draft, we can also set up an online forum where the Ministry of Finance calls on all sectors of the society to make extensive comments on the consultation draft, and all sectors of the community can easily advance while other people can also see the solicitation. The entire process of feedback on the draft.

Accounting standard-setting institutions shall sort out, classify, and study carefully the revised opinions received in a timely manner, and regularly publish the sorting, classification results, and adoption of the feedback they have received, and the unsuccessful comments shall indicate those that have not been adopted. For reasons, the submitters whose feedback has been adopted can be encouraged by means of issuing honorary certificates or even material rewards. To promote their participation.

(3) The process of formulating publicity guidelines is subject to public supervision. Increase the transparency of the accounting standards development process. After the establishment of the Accounting Standards Committee of the Ministry of Finance, China has made substantial progress in the development of accounting standards. However, the transparency of the development of accounting standards should be further improved. Other relevant information was posted online, including the reasons for accepting the comments and in-depth consideration of refusing to accept the comments. In this way, it is possible to form an effective communication platform, fully mobilize the enthusiasm of the academic and business communities to participate in the formulation of accounting standards, and form an interaction between accounting standard makers and accounting standard implementers, which will help improve China's accounting standards Quality is also in line with China's commitment to transparency in capital market information disclosure after joining the WTO.

(4) Hearing system before the release of accounting standards. This can not only enable more people to participate in the formulation of standards, make accounting standards have higher fairness and credibility, but also help to better understand the standards and implement them more effectively. The process is also the process of publicizing the guidelines.

Procedural justice in the accounting process

As for the accounting information calculation, it is generally considered that the false accounting information generated by the accounting is regarded as one of the manifestations of the unfair accounting information. The definition of "false" is generally considered to be a violation of accounting standards and accounting regulations. The text of accounting standards contains the nature of procedures, and the accounting process can be regarded as the implementation of a series of procedures for accounting standards. Therefore, we can think that as long as the information is processed and processed in strict accordance with the accounting standards and accounting regulations, the accounting calculation is compliant, and the accounting information generated is true and fair. In other words, confirmation, measurement, recording and reporting in accordance with accounting standards are in compliance with standards, allowable, true and fair. Therefore, to promote the fairness of accounting procedures in the accounting process, it is only necessary to ensure that accounting personnel strictly abide by the requirements of accounting standards and accounting systems. Therefore, the issue of fairness in the accounting link is transformed into the process of formulating accounting standards. If all accounting entities have strictly implemented the accounting standards in their individual acts of accounting, the accounting process can be considered to be to a certain extent consistent with the concept of procedures and fair.

Procedural justice in the process of accounting information disclosure

The accounting information disclosed by listed companies is an important basis for analyzing the value of stock investments. Therefore, whether the information disclosed is true, timely, complete and accurate is an important measure of whether the securities market is open, fair and just. For investors, the return on investment is directly proportional to the amount of information they receive. A fair capital market must not allow some investors to enjoy information, and another investor to stay away from information, but to strive to make all investors as much information as possible at the same time. Therefore, not only are listed companies required to disclose information regularly and in a timely manner, they also need to strengthen social supervision and develop and implement an effective concept of procedural fairness so that all investors can use information fairly and meet the requirements of accounting justice.

The significance of procedural justice to ensure the fairness of accounting information disclosure lies in the premise that the results of accounting information disclosure cannot be guaranteed to be fairthat is, the accounting information can be completely and timely passed to all information usersusing the procedures To avoid the disadvantages caused by untimely and inadequate information transmission, to avoid human factors from interfering with information disclosure as much as possible, to enhance the public's trust in information disclosure, and to achieve fairness in accounting information disclosure to a certain extent. The following measures are proposed:

The first is to shorten the time for disclosure of accounting information, and to minimize the degree of asymmetry of information caused by listed companies' deliberate delay. In recent years, the international community has gradually reduced the time limit for annual report disclosure. For example, the US Securities and Exchange Commission has required the Sarbanes-Oxley Act to improve the timeliness of accounting information after the Enron incident, and has made provisions to reduce the statutory period for annual report disclosure : The annual report deadline for 2003 is 75 days, and the annual report deadline for 2004 has been changed to 60 days. Aiming at the trend of shortening the international disclosure period, according to China's specific circumstances, the annual report period should be appropriately shortened. This article considers that the annual report period should be a 90-day disclosure period. Many scholars' empirical research also supports this view.

The second is the networked and one-stop accounting information disclosure channels. The purpose is to enable as many investors and information users as possible to obtain "zero-day" accounting information in order to facilitate the timely judgment of accounting information users, reduce market insider trading behavior, and ensure that all stakeholders enjoy equal treatment.

Thirdly, mandatory multimedia disclosure and broadening the channels of information disclosure. The so-called "multimedia" emphasizes that the media's superior resources are complementary to break through the inherent limitations of a single media.

Finally, it is required to issue audit reports for special transactions, increase audit links, and increase supervision of information disclosure. For example, to clarify the credit status and related relationship of a listed company and its affiliated companies, a listed company must hire a certified public accountant to audit the authenticity of connected transactions and unusually unfair transactions such as abnormal transaction matters, and make detailed disclosures.