This service is a core module of China Compliance Risk Review™, designed to support the overall compliance infrastructure for China operations.
Assessing Whether Your China Compliance Position Is Defensible When Questioned
When Accounting Appears Correct, but the Tax Position Cannot Be Clearly Explained
In China, many compliance issues do not stem from obvious violations, but from gradual misalignment between accounting treatment and tax filing positions.
Such inconsistencies often go unnoticed during routine operations, yet become critical when challenged by tax authorities, auditors, or headquarters.
The Accounting–Tax Alignment Risk Review is designed to assess these foundational and often hidden risks.
What Is Accounting–Tax Alignment Risk
Accounting–tax alignment risk refers to situations where:
Accounting treatment and tax filing logic are not fully consistent
Historical positions have shifted without clear justification
Financial results appear reasonable, but tax explanations are weak
Practices drift over time due to personnel or policy changes
These risks may persist quietly until scrutiny occurs, at which point they become difficult and costly to explain.
Key Focus Areas of the Review
1 Consistency Between Accounting Treatment and Tax Filings
Alignment of revenue, cost and expense recognition
Existence of differing accounting and tax positions
Temporary or ad hoc treatments adopted for short-term needs
2 Continuity and Explainability of Historical Positions
Consistency across years and personnel changes
Rationale for any changes in treatment
Availability of historical data to support current positions
3 Exposure Under Audit and Inspection Scenarios
Areas most likely to be questioned by tax authorities
Issues requiring repeated explanation during audits or due diligence
Matters that could trigger broader review once identified
Typical Risk Scenarios
Tax authorities request justification for accounting treatment
Auditors identify misalignment and request restatement or clarification
Headquarters question the reliability of China financial results
Compliance issues are manageable, but explanation costs are high
What This Review Does Not Include
To avoid misunderstanding, this service does not include:
l Routine bookkeeping or tax filing
l Audit or forensic review
l Execution of corrections or remediation
l Any guarantee regarding compliance outcomes
This is an assessment and explainability-focused advisory service, not an execution or correction package.
Deliverables
Clients will receive:
Accounting–tax alignment risk rating (Low / Medium / High)
Professional explanation of key risk areas
Identification of issues requiring attention versus acceptable deviations
Executive-level summary for management and headquarters
Who This Is For
Foreign-invested enterprises with established China operations
Companies experiencing personnel or policy changes
Organizations preparing for audits, due diligence or tax inspections
Management teams seeking confidence in the defensibility of China data
Position Within the Service Framework
The Accounting–Tax Alignment Risk Review typically serves as:
A core module of China Compliance Risk Review™
A health check on the operation of China Entity Foundation™
An input for further compliance, governance or restructuring decisions
Closing Statement
Many risks arise not from doing the wrong thing, but from being unable to clearly explain why things were done this way.
We do not make decisions for you; we only help you clarify facts and risks.
Phone : 400 800 7472
Email : info@rtfcpa.com
感谢你的阅读，本文出自 RTF，转载时请注明出处，谢谢合作。
