Ministry of Finance, Internal Accounting Control Standards - Sales and Receipt of Payment (Trial Implementation)

Issued: December 23 2002
Effective: as of date of issue
Interpreting authority: Ministry of Finance
Applicability: The Standards apply to all companies, enterprises and all other work units that engage in sales business
(Article 2).

Main contents: The Standards require work units to establish an internal segregation of duties with regard to sales, delivery and receipt of payment (Articles 5 and 6). A strict authorization and approval system for sales and receipt of payment should also be established (Article 9). Part Three entitled "Controlling Sales and Delivery" requires work units to institute a strict budgetary system, set sales goals and establish a responsibility system for sales management (Article 13). Sales and delivery must be performed according to the requisite procedures (Article 17). Part Four entitled "Controlling Receipt of Payment" deals with the handling of sales revenue, accounts receivable, bad debts, negotiable instruments receivable and external confirmation. Part Five calls for the establishment of a supervision and inspection system for internal control of sales and receipt of payment.
Related legislation: PRC Accounting Law (Revised), Oct 31 1999, CLP 2000 No.1 p4 and Internal Accounting Control Standards - Basic Standards (Trial Implementation), Jun 22 2001, CLP 2001 No.7 p4