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Inspirations drawn from the practice of compiling consolidated financial statements in Orange County of California (No 81, 2015)


Zhang Junwei, Research Department of Macro-economy of DRC

Research Report No 81, 2015 (Total 4766)


Compiling consolidated financial statements is currently one of the most important parts of China's fiscal reform. As for the compilation and publishment of consolidated financial statements, there has already been some relatively proven experience in the world. This paper, taking Orange County in California of the United States as an example, gives a detailed introduction to the practice of compiling consolidated financial statements in American local governments. From the practice of Orange County, the following inspirations could be drawn. First, the consolidated financial statements should manifest the characteristics of national circumstances, not only complying with the common practice in the world, but also helping to alleviate the main contradictions and problems. Second, the consistency of the data should be guaranteed to improve the credibility of consolidated financial statements. Third, attention should be paid to the issue of debt so as to bring into play the positive role of consolidated financial statements in leading government to strengthen debt management. Fourth, the Ministry of Finance and the financial departments of various provinces (autonomous regions and centrally-administered municipalities) should provide relevant technique support and aid. And fifth, various methods should be adopted to ensure the reliability and credibility of the consolidated financial statements.