It's been four years since the mainland began formally adopting a significant number of accounting standards laid out by the International Accounting Standards Board (IASB). In 2007, a process of convergence began, with Chinese accounting standards largely being replaced with standards more in keeping with international financial reporting standards (IFRS) in an attempt to bring the mainland more in line with the rest of the world. Rather than gradually phasing in the new standards, the mainland chose to adopt the main standards in bulk, tailoring them to their needs and translating the relevant points of IFRS into the Chinese accounting standards system. The decision to bring the nation's accounting standards, largely in line with global norms, was seen as further evidence of the government's determination to internationalise its economy and business practices. 'China has come a long way in a short time,' says Clement Chan, managing partner at BDO. 'The rate of change really has been remarkable.' Reflecting the continuing development and reform throughout China, changes to accounting standards have brought the mainland closer to being on a level playing field with the rest of the world. Instead of the Hong Kong method of adopting IFRS in word-for-word translations, the mainland's approach has been to shape individual standards based on the relevant IFRS principles. 'I think it's been the absolute right approach,' says Yvonne Kam, a partner at PricewaterhouseCoopers in Shanghai, who believes clarity has improved in translation. 'The English language standards can sometimes be long and convoluted - it's been much more straightforward in Chinese.' But to non-Chinese speakers and readers, publishing the guidance and updates only in Chinese leaves a barrier to accessibility. 'Not adopting IFRS word for word makes sense for the moment for China, but greater transparency would help persuade the wider world to accept that the Chinese standards really are converged,' says Catherine Morley, a professional practice partner at KPMG. There are still differences that mark out the mainland system from other international jurisdictions. It maintains an exemption for state-owned enterprises from applying 'related party' disclosure provisions because of the still apparent dominance of government-backed enterprises in all aspects of the economy. But it is also involved in shaping the future of IFRS to reduce these differences. 'China has a member on the IASB itself and it has been instrumental in setting up the AOSSG [Asian-Oceanian Standard-Setters Group] to give Asia a stronger collective voice at international level,' Morley says. The 'moving target' nature of IFRS, which is due for its next major overhaul in 2015, also means the mainland's selective adoption approach has been appropriate for its needs. The nation's short but intense history of privatisation has also meant that there are sometimes issues with historical data and having a deep enough market or industry background, meaning there might be difficulty in getting hold of data. 'Take the valuation of financial instruments as an example,' says Yin Toa Lee, partner and financial accounting advisory leader for financial services in the Far East at Ernst & Young. 'It tends to be a very challenging price-discovery process in China to come up with a single point valuation. But because of the short history behind making market consensus-based disclosure in China, there's a lot of extrapolation and calibration that need to be done behind the scenes.' The small number of mainland-based senior management in the accounting industry, partly due to China's historical upheaval, means many senior roles are filled by people from Hong Kong or overseas. 'There's a gap of people with that level of international experience and understanding of China-specific business practices,' Lee says. 'A huge emphasis is being placed on audit testing and education to compensate for allowing younger, less experienced preparers to make judgments on their own.'