August 14, 2026 (InvestinChina.asia) – The China Securities Regulatory Commission (CSRC) on Thursday released its Accounting Supervision Report on Listed Companies’ 2025 Annual Financial Reports, revealing that 214 of the 5,517 companies that filed annual reports by the April 30 deadline received non-standard audit opinions — a sign that financial-disclosure quality, while broadly sound, still harbors persistent soft spots.
Of the 5,517 companies that disclosed 2025 annual results, 3,201 were Main Board listings, 1,397 were on the ChiNext board, 608 on the STAR Market and 311 on the Beijing Stock Exchange. Among those filing on time, 214 drew non-standard audit opinions: 109 qualified opinions with emphasis-of-matter or going-concern paragraphs, 87 qualified opinions and 18 disclaimers of opinion, according to the report.
The CSRC organized a dedicated team to conduct a sample review of the 2025 annual financial reports, on the basis of which it compiled the supervision report. Overall, listed companies demonstrated a sound understanding and execution of the Enterprise Accounting Standards and financial-disclosure rules, the regulator said. Yet a portion of companies still committed accounting-treatment or financial-disclosure errors in areas including revenue recognition, financial instruments, long-term equity investments and business combinations, asset impairment, and research-and-development expenditures.
Research Spending Emerges as a New Frontline
Among the problem areas, R&D expenditure stands out as a newly highlighted focus. The CSRC’s sample review found cases where companies improperly accounted for outsourced R&D spending, failed to properly measure intangible assets and inventory generated during customized product development, or incorrectly recognized expenses related to internal R&D projects. The regulator stressed that companies must apply the capitalization criteria prudently and must not inflate intangible assets.
For internally used technical-capability-layer software intended to support subsequent R&D, the report makes clear that unless there is conclusive evidence of a mature external market for the related products and technology, it is generally difficult to prove the software itself has a market or sufficient usefulness. In such cases, the upfront R&D expenditure does not meet capitalization criteria, cannot be recognized as an intangible asset, and must be charged to current-period profit or loss.
Revenue-related problems centered on the improper use of the net method to recognize revenue, incorrect recognition and measurement of contract fulfillment costs, faulty judgment on the timing of control transfer, and inappropriate handling of variable consideration. In financial instruments, the CSRC identified errors in accounting for investments in limited-life vehicles, recognizing obligations to purchase subsidiaries’ equity from other investors, measuring expected credit losses on contract assets, and calculating financial-asset fair values. Long-term equity investments and business combinations saw mistakes in determining consolidation scope, recognizing associates’ investment income, and accounting for equity disposals. Asset-impairment issues included improper asset-group definitions for impairment testing, flawed goodwill-impairment testing, and inadequate provisioning for long-term equity investment impairment.
Four Priorities for Next Steps
The CSRC laid out four priorities for follow-up action. First, it will thoroughly implement the decisions and deployments of the Party Central Committee and the State Council, continuously refine the supervision mechanism for listed companies’ financial disclosure and enhance regulatory effectiveness. Second, it will track the various issues identified in the financial-report reviews and carry out subsequent supervision and handling in accordance with laws and regulations. Third, it will strengthen regulatory coordination and unify supervision standards around the common, prominent issues surfaced in its work. Fourth, it will intensify practical guidance on hot and difficult accounting issues in the market, steadily improving the consistency and effectiveness of Enterprise Accounting Standards and financial-disclosure rule implementation across the capital market.
The CSRC called on listed companies and intermediaries such as accounting firms to attach great importance to the issues revealed in the supervision report, earnestly correct errors in financial reports, timely master and correctly execute the Enterprise Accounting Standards and financial-disclosure rules, and solidly carry out financial-report disclosure work. Improving the quality of accounting information disclosure, the regulator said, is a shared responsibility that will jointly advance the high-quality development of the capital market.
The release of the annual accounting supervision report has become an established mechanism through which the CSRC communicates both the aggregate state of financial disclosure among listed companies and the specific areas demanding heightened vigilance. This year’s edition sends a clear signal: while the market’s overall accounting quality holds up, revenue recognition, financial-instrument measurement, business-combination accounting, asset impairment and — most notably — R&D capitalization will remain squarely in the regulator’s crosshairs.