This document discusses credit assessments for companies in mainland China. It notes that while the large number of companies in China opens opportunities for lending, the differing accounting practices and lack of transparency make assessing credit risk challenging using existing techniques. The course will highlight these challenges and propose solutions, discussing contemporary practices that balance business goals with effective risk control. It will cover topics like credit rating agencies, accounting standards, default records, financial distress assessments, and forensic accounting techniques.

1. Credit assessments in mainland China
Objective
The large number of companies in mainland China opens a huge opportunity of lending
business to financial institutions. Banks are aggressive in soliciting lending business
from corporations and individuals in mainland China. On the other hand, this business
opportunity also demands a revolutionary methodology to measuring relevant credit risk.
Most banks have experienced that the existing credit assessment techniques are lack of
effectiveness in assessing the credit quality of companies in mainland China, partially due
to the difference in accounting practices and the lack of transparency in financial data.
This course highlights the major challenges facing the financial institutions in assessing
credit risk of companies in mainland China and proposes feasible solutions. The
contemporary sound practices will be discussed with an emphasis on balancing the
business initiatives from frontline marketing staff and the effective control from risk
management officers.
Contents
• Credit rating agencies in mainland China
• China accounting standard vs international financial reporting standard
• Accessibility of default records
• Financial distress: a new dimension of credit assessment
• Manipulations to financial statement
• Forensic accounting
• On-site due diligence
• Sound practices and common issues
Duration
3 hours
Level
Standard