As the Chinese government has been aware of the necessary of reducing the energy consumption, In addition, taking actions to control energy-related pollution. From the year of 1979, such as Environmental Protection Law for Trial Implementation; Constitution included important environmental protection provisions, series of laws has been passed by Chinese government.
However, due to some of factories in China do not obey these rules and still emitted exceeding pollutant, Chinese government has attempt to using investment incentives to solving these problems, CIT( Corporate income tax) and CDM( The clean development mechanism) and other measurement have been applied to encourage the investors also including foreign companies to cooperate and invest in the field of new energy, and to decrease the degree of relying on fossil energy (KPMG, 2014). In the process of changing the way of Chinese economic drivers, how well the enterprise of behavior can be shaped is not only decided by the government policy, Auditing, especially some external auditors, as monitors for government policy, are really crucial.
The objectives of the research is to show how well the Chinese economic growth drivers relate with environmental effects; to relate the impacts of incentivized investment with social concerns, and to show how economic growth and social factors conflict demanding major energy related solutions to associated challenges such as diseases, unproductive land, and diminishing population.
What role has been played by the Chinese accounting audit system in reducing energy consumption as foreign investment has been increased?
Scope and Limitations of the Research
The scope of this research is manageable as it aimed at considering the impacts foreign investment has had in increasing energy consumption. In this case, the research takes into account two sectors namely Construction and Transport also comparing with the situation in developed market (UK). Under each sector/industry, this research will consider a foreign investor in that sector. Each case would show how energy consumption has changed the last 10 years as well as the Auditing system influencing the energy revolution.
Among the limitations of this research is lack of primary sources to connect the accounting system and the energy division. Due to the distinct nature of accounting and energy, a knowledge gap to connect accounting-related economic impact with associated demand for changes in the energy. In this case, the research relies on accounting and foreign investment policies to show how economic growth has nurtured the government and activist groups to rethink the energy policies enacted support the economic goals.
Motivation and Originality of Contribution
The motivation to undertake this research comes from the insufficient information on how major economic factors can influence social movements capable of revolutionizing industries (Gupta, 2014). To provide insight on how accounting systems and auditing practices influence increased economic growth, this research relies on published economic data on foreign investment in China, energy production and consumption in China, and changes in the Chinese Energy consumption. The originality of this research is based on the fact that none other existing research aims at relating governance, social, and industrial concerns over factors such as strategies, challenges, and changes respectively.