Prudent accounting principles, on accountant is a fixed function, it requires the general principles of the enterprise in the face of uncertainty factors in professional judgment, should maintain necessary cautious, fully estimated to various liabilities, losses and expenses, as far as possible or no plan of assets and income may be. But as an accounting principles in practice, it has obvious tendency, subjective judgement and limitations. The paper introduces the principle of prudent accounting in China and the meaning of present situation of the application of the system, and expounds the principle of caution in accounting application, reveals the existing problems, and puts forward some Suggestions and measures.