A comparative analysis of two national accounting models and their alignment with the International Financial Reporting Standards — across history, regulation, methodology, digitalization, and control.
A Roman-Germanic system adapted to European practice, oriented toward IFRS harmonization and decentralized control.
A modernized system combining international standards with centralized state regulation through CAS and the Golden Tax System.
This study provides a comparative analysis of the accounting systems of Ukraine and China, focusing on their alignment with the International Financial Reporting Standards (IFRS). The paper examines key aspects of the historical development, regulatory frameworks, and methodological approaches to accounting in both countries. It has been established that Ukraine follows a continental accounting model adapted to European practices, while China employs a mixed system that combines international standards with centralized state regulation.
Special attention is given to the level of digitalization and automation of accounting processes, highlighting China's implementation of the Golden Tax System and the use of artificial intelligence technologies. The study identifies key similarities between the two accounting systems, such as integration with tax authorities and financial reporting standardization, while emphasizing differences in regulatory approaches, the degree of centralization, and flexibility in responding to economic changes.
The research explores the challenges and prospects for improving Ukraine's accounting system by incorporating best practices from China, including the development of a unified digital platform for accounting and taxation, the automation of accounting processes, and the adoption of blockchain and Big Data technologies to minimize financial fraud. The paper provides recommendations for enhancing financial transparency, reducing administrative burdens on businesses, and improving the efficiency of government oversight.
In conditions of globalization and economic integration, the effective functioning of national accounting systems is an important factor in the development of business and international cooperation. Ukraine and China have different economic models, historical prerequisites and legal systems, which affects the formation of their accounting standards.
Identify the key similarities and differences between the accounting systems of Ukraine and China.
Assess the level of adaptation of the accounting standards of both countries to international norms.
Identify potential areas for the harmonization of accounting systems to facilitate cooperation between business entities of Ukraine and China.
Analyzes the peculiarities of accounting in China and compares them with the Ukrainian system, noting that despite geographical, political and economic differences, the national accounting systems of China and Ukraine have certain similarities.
Study the accounting and financial reporting standards approved in China, the USA and the European Union, analyzing similarities and differences in relation to IFRS and the algorithms for adopting changes in national standards.
Outline the foreign experience of organizing accounting and classify international accounting principles, the structure and forms of financial reporting, and the financial accounting system — including the features of accounting in China.
Examines the current state and directions for development of accounting in Ukraine, proposing differentiated reporting requirements and a methodology for transforming Ukrainian financial statements into IFRS reporting.
Most studies consider general aspects of accounting systems, but there is a lack of an in-depth comparison of methodologies — methods for valuing assets, liabilities, income and expenses; a comprehensive comparison of accounting principles (historical cost, fair value); analysis of the actual level of harmonization with IFRS and existing deviations; and the impact of the legal system, tax policy and economic regulation on accounting practice.
The accounting systems of Ukraine and China belong to different types due to the specifics of their economies, legal systems, and approaches to accounting regulation.
Table 1 · Main differences between the accounting systems
A side-by-side reading of the two models across the six comparison criteria of Table 1.
Illustrative summary of the comparative levels described in the article (qualitative reading, not measured data). Higher values indicate a stronger presence of the labelled characteristic.
Accounting practices in China began much earlier than in Ukraine — and so did double-entry bookkeeping and the borrowing of Western standards. Only the Soviet period in Ukraine and the socialist era in China share similar features, when accounting in both countries was subordinated to planned resource allocation.
Table 2 · Main stages of development of accounting
Accounting conducted as censuses, records of natural exchange, collection of tribute and trade transactions. Primitive records kept on scrolls, charters or wooden tablets.
Foundations of accounting for tax collection and state property emerged. Classical Chinese accounting used a «san-jiang» (三章) system of three sections — income, expenses, balances — recorded on bamboo plates and scrolls.
Development of the accounting system in the Hetmanate: detailed documents for military needs, estate management and financing. Estates reflected income and expenses; main documents were registers and books.
Development of accounting in trading houses and large trading guilds, which kept detailed systems for goods. From the 13th century the Chinese began to use a prototype of double-entry bookkeeping independently of Europe.
Ukrainian practice borrowed the accounting practices of the Russian Empire, which used simple accounting books. Industrial development and the growth of manufactories and factories led to more complex forms of accounting.
Between the end of the Qin dynasty and the Republic (1912), China began to borrow Western accounting standards, in particular from Great Britain and the United States. At the end of the 19th century the first official regulations for state-owned enterprises were introduced.
Centralized accounting regulated through plans and directives. During collectivization and industrialization, accounting was oriented toward the needs of state planning and statistics, with a single reporting form for all enterprises.
Under the planned economy, the central government controlled all accounting processes, subordinated to planned resource allocation. A unification policy required all enterprises to keep accounts according to uniform government standards.
Accounting reform with the transition to a market economy and adaptation of national standards to IFRS. Digitalization policy, integration with tax systems, and EU integration through increased use of IFRS to harmonize with European practices.
Accounting reform during the Deng Xiaoping period introduced the Chinese Accounting Standards (CAS), adapted to international standards with national characteristics. Widespread use of automated systems and the introduction of blockchain technologies.
Table 3 · Comparison of key points in the development of accounting
Table 4 of the study sets the two systems against one another across the full range of accounting, tax, legal and control characteristics. Open any dimension to read Ukraine and China in parallel.
Reflects assets, liabilities and equity as of a certain date. Assets are divided into current and non-current (long-term); liabilities are likewise classified into current and non-current.
Shows the company's revenue, expenses and net profit for a period — including operating income, financial expenses and taxes.
Reflects cash inflows and outflows, divided into three categories: operating, investing and financing activities.
Shows changes in the company's equity during the period, including additional share issues, dividends and retained earnings.
Provide details on accounting policies, significant transactions, estimates, risks and subsidiary calculations, enhancing understanding of the main statements.
Use of CAS, adapted to IFRS, with uniform rules applied to all business entities regardless of ownership.
All financial information must be accurate, substantiated and supported by documents, ensuring transparency for external users.
A conservative approach: income is recognized only after it is actually received, and potential losses are recognized as soon as they become possible.
Accounting methods should be stable to ensure comparability of reporting between different periods or companies.
All business transactions are expressed in value indicators based on the national currency (yuan).
Only material elements that can influence users' decision-making should be reflected in the reporting.
Ukraine · large-enterprise thresholds — meeting at least two of three criteria
The liability system in China is much stricter and integrated in real time, allowing more effective detection and prevention of violations. In Ukraine, control is more flexible, focused on helping businesses correct errors — which creates risks of abuse due to insufficient automation.
Table 5 · Comparison of liability for violations
Maximum terms of imprisonment cited in the study for tax and reporting offences.
For China, tax evasion carries imprisonment of 3–7 years (upper bound shown). Figures are reproduced from the study's "Liability for violations" comparison.
Ukraine belongs to the continental accounting system, focused on harmonization with international standards and transparency for investors. China uses a mixed system with strict state control and the integration of accounting and tax accounting through digital technologies.
There is no ideal accounting model. The key differences are determined by the economic models of the two countries: Ukraine is a market economy seeking integration into the global system, while China has an economy with a high level of state influence that uses accounting as a tool for strategic management. For the conditions of Ukraine, a combination of models should be chosen — avoiding the shortcomings of each and emphasizing their advantages.
Based on the comparison, several promising areas for improving Ukrainian accounting practices can be identified, relying on China's best practices and international experience.
China has achieved significant success in implementing digital technologies in accounting and tax reporting; Ukraine is moving in this direction but needs further improvement.
In China, tax and accounting reporting are combined into a single system; in Ukraine they remain separated, which creates difficulties for businesses.
The Chinese experience of strict control requires strengthening centralized control over accounting and the transparency of financial reporting, to minimize tax abuse.
Approaches to financial reporting in Ukraine can be improved by combining simplification for the smallest businesses with stronger transparency for the largest.
Applying these approaches will allow Ukraine not only to simplify accounting processes but also to increase the transparency and efficiency of the financial system — contributing to attracting investment and business development.