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Revision of Measures for the Administration of Accounting Archives of the PRC

Written by: Mr. Roy Lam (Senior Risk Consultant)

With the volatile commercial market and the increasing use of information technology, there is a material change of the contents, forms, management styles and usages of accounting files nowadays. For this reason, on 11 December 2015, The Ministry of Finance and The State Archives Administration of the PRC amended the Measures for the Administration of Accounting Archives (Ministry of Finance and State Archives Administration Order No. 79) (“New Revision”). The measures, in effect from 1 January 2016, replaced the previous Order on 21 August 1998. The New Revision allows certain kinds of accounting records to be stored and kept in electronic form rather than hard copies. The New Revision not only saves costs on printing, transmitting, filing and maintaining hardcopy files for the companies, but also shows how information technology promotes a better handling in data and records. The amendments clearly defined and promoted the application of electronic accounting records, which also conformed to the environmental protection policy of the PRC. The key changes are as follows:

Extended Definition of Accounting Records

According to the New Revision, files generated, transmitted and stored by all means, especially electronic devices (for instance computers), are classified as accounting records. Keeping these files, mostly in the format of texts, tables and charts, can help the company to monitor its business performance and manage and access their accounting records more efficiently, thereby increasing the productivity.


Simplified Classification of the Retention Period of Accounting Records

In the New Revision, the retention period of accounting records are reclassified into two types, permanent term and fixed term (10 or 30 years). Certain important accounting documents, such as annual financial reports, are classified as permanent term. Meanwhile, the retention period of accounting vouchers and account books are extended to 30 years.

Accounting records are important for the company’s stakeholders, such as shareholders, potential investors and bankers. Thus sufficient controls should be established to safeguard the accounting system and relevant accounting data.


Management of Electronic Accounting Records

Accounting records generated internally can be retained solely in electronic form if the following criteria are fulfilled:

1. Ensure the source of the electronic accounting records to be true and valid, and it is generated and transmitted through computers or any other electronic devices.

2. The accounting records management system must be good enough to manage the accounting e-files efficiently and adequately; retain electronic records in a long term; and set up a cross-referencing system between the hardcopy files and the electronic accounting records.

3. The accounting system must be good enough to track and restore the electronic accounting data accurately and effectively; and generate output, for instance, accounting vouchers, account books and financial statements, in accordance with the archive standard of the PRC.

4. Construct necessary audit and control procedures to handle, review and approve the accounting data. Electronic accounting records must be safeguarded by appropriate measures.

5. The accounting records do not have any significant value to be retained permanently.

6. Establish a backup system to prevent the impacts caused by any natural disasters, accidents and man-made damages.


Loose Requirement for Transferring Accounting Records to the Overseas

Accounting records and copies from all PRC organizations were strictly forbidden to be carried and transmitted to the overseas in the past. However, the New Revision allows the transfer of accounting records as long as the company complies with the relevant PRC laws and regulations.


Refined Procedures on the Destruction of Accounting Records

1. Compile a list of the destroyed accounting records details, including file name, file number, number of volume, related accounting period, archive serial number, required retention period, actual retention period and date of destruction. It must be kept by the company‘s administration or other related responsible department.

2. Responsible officer of the company, responsible officer of the finance department and responsible officer of the administration/ filing department who archives and manages accounting records should sign on the list of destroyed accounting records.

3. In the destruction process, the responsible officer should verify and check the destroyed accounting records list before destroying the records. He/she should also sign on the destroyed accounting records list after destruction.

The Measures for the Administration of Accounting Archives (Ministry of Finance and State Archives Administration Order No. 79) issued by the Ministry of Finance and The State Archives Administration of PRC on 11 December 2015


If there are any aspects which we may assist, please do not hesitate to contact:

Managing Partner - Mr. Roy Lo
roy.lo@shinewing.hk (Tel. 3583 8048) or

Senior Risk Manager - Ms. Gloria So
gloria.so@shinewing.hk (Tel. 3583 8517)


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T. (852) 3583 8000

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W. www.shinewing.hk

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