1. Revenue-cost matching: following the accrual basis and the new revenue standards, revenue is recognized based on the transfer of control rights, and the corresponding performance costs are carried forward simultaneously during the performance period or at the time of performance, truly and accurately reflecting the current operating results.
2. Profits must be true and legal: Accounting shall be based on true, complete and legitimate business, and it is strictly prohibited to adjust profits through false provisional estimates, arbitrary early or delayed recognition of profits and losses, etc. Provisional estimates apply to all types of assets, costs and expenses that have occurred and are attributable to the current period.
3. Losses are reasonable and compliant: Normal operating losses of an enterprise comply with legal requirements, but long-term, large and continuous losses without reasonable business reasons can easily trigger risk assessments by tax authorities, and there is no unified legal safe loss limit.
4. Small and low-profit enterprises are recognized as compliant: Resident enterprises engaged in national non-restricted and prohibited industries must also meet the following requirements: number of employees (including dispatched workers) ≤ 300, annual taxable income ≤ 3 million yuan, and total assets ≤ 50 million yuan (number of employees and total assets are calculated based on the annual quarterly average), and can enjoy corporate income tax benefits.
5. Asset balance specifications: The book balance of monetary funds must not be a negative number; if there is a negative number in inventory, the accounting treatment must be verified; the book value of fixed assets is the original value minus accumulated depreciation and impairment provisions, the minimum is zero, and it must not be a negative number.
6. Industry account matching: Pure service companies usually do not have large inventory of goods. If there is inventory, it should be consistent with the actual concurrent sales, material reserves and other business contents.
7. The deduction of business entertainment expenses is reasonable: Business entertainment expenses incurred by an enterprise related to production and operation activities are deducted before tax based on the lower principle of 60% of the amount incurred and 5‰ of the current year’s sales (operating) income. There is no official optimal control ratio.
8. Compliance with the deduction of employee welfare fees: The actual employee welfare expenses incurred by the enterprise, which does not exceed 14% of the total wages and salaries, are allowed to be deducted before corporate income tax.
9. Profit distribution compliance: Enterprise profit distribution should be based on the fulfillment of distribution conditions, and illegal distribution is not allowed without making up for losses and failing to meet distribution requirements.
10. Compliance in the management of current accounts: receivables, payables and other current accounts should be checked regularly and cleared in a timely manner; long-term outstanding accounts and large abnormal transactions need to verify the business essence to prevent risks such as hidden income and falsely stated costs.
11. Borrowing compliance for natural person shareholders: Except for sole proprietorships and partnerships, if a natural person shareholder borrows money from an invested enterprise and neither returns it nor uses it for the production and operation of the enterprise after the end of the tax year, it will be regarded as dividend income and a 20% personal income tax will be levied.
12. Declaring tax burdens truthfully and in compliance: Industry tax burden rates are only reference indicators. Enterprises should declare taxes in accordance with the law based on real business. It is strictly prohibited to artificially adjust income, input tax, etc. to control tax burdens in violation of regulations.
13. Compliance with depreciation of fixed assets: Fixed assets should be depreciated reasonably within their estimated service life. The residual value rate is reasonably determined by the enterprise based on the actual situation. There is no unified statutory ratio under tax law.
14. Compliance in the presentation of employee compensation: When there is a debit balance in employee compensation payable, it is generally because the actual amount paid or paid is greater than the accrued amount, which is a normal accounting difference. It is reclassified to other current assets when the statement is presented, and is not an inevitable accounting error.
15. Income is true and complete: The income recognized in the books should be mutually verified and consistent with the original documents such as contracts, service/delivery documents, invoices, capital flows, and warehouse outgoing documents.
16. Accounting and tax difference management and compliance: The book balance of taxes payable and the tax returns should be checked regularly. Differences arising from accounting treatment and tax law regulations need to be accurately identified, accounted for and disclosed.
17. The balance of undistributed profits is reasonable: Undistributed profits at the end of the period = Undistributed profits at the beginning of the period + Net profit for the year – Withdrawal of surplus reserve – Profit distribution for the period.
18. Reasonable cash flow: Profit is accounting income, and cash flow is the basis for a company's ongoing operations. Focus should be placed on the authenticity, adequacy, and rationality of cash flow from operating activities.
19. Possess a business-financial integration mindset: Finance has shifted from post-event accounting to ex-ante prediction, in-process control, and post-event analysis, using data to support business decisions, cost control, and operational efficiency improvements.
20. Risk-return balance: All decisions such as operations, investment, and financing are based on compliance, taking into account profitability, liquidity, and safety, and avoiding being overly aggressive or overly conservative.
