Since the beginning of reform, China has made progress in improving accounting codes. Apparently, the designing and implementation of accounting codes can influence information truthfulness and give rise to the opportunities to produce false information. Accounting codes is a very technical issue. Many think the accounting codes as a “steel ruler” that allows no vagueness.
However, the complexity of modern economy has put some areas of accounting subject to discretion and interpretation or even personal preference which result in a ruler with flexibility. The issue of accounting codes did not attract much attention at the beginning of the reform. It was not until 1993 that reforms were witnessed in corporate accounting and regulations.