At the recent Working Conference of Accounting Supervision in 2009 held by the China Securities Regulatory Commission (CSRC), Li Xiaoxue, Party Committee Member and Secretary of the Discipline Inspection Committee of the CSRC, said that accounting firms should brace for the cross-border business. In future, the CSRC will promote the mainland accounting firms to participate in the pilot audit for H share companies in a steady and orderly way and launch the guidance on responsibility recognition of accounting firms and accountants as soon as possible.
According to Li, in the past year, in order to improve the quality of accounting information about the capital market, the CSRC made efforts to boost the listed companies’ governance and internal control construction, established and perfected the mechanism of communication and coordination among accounting firms, listed companies and securities regulatory bureaus, urged accounting firms to strengthen the selection, appointment and evaluation of signing accountants, intensified the spot inspection and follow-up supervision, and toughened the punishment on violations of accounting firms and practitioners. The accounting firms with the qualifications for securities and futures businesses, by perfecting the internal governance, quality control and practicing quality, completed the audit on annual reports of 1,622 listed companies, 107 securities companies, 163 futures companies and 61 fund management companies. In the re-launch of new share issuance, the launch of Growth Enterprise Board and the promotion of listed companies’ M & A and reorganization, the Certified Public Accountants (CPAs), in strict accordance with the requirements of the laws and the CSRC, have assisted in the successful adoption of important reform measures on the capital market by issuing professional audit opinions on enterprises’ issuance, listing, M & A and reorganization.
Following the growth of China’s capital market, the gradual establishment and improvement of a multi-level market system, the further opening-up of the capital market and the implementation of enterprises’ internal control standard, the practicing accounting firms on the capital market are faced with an important opportunity as well as new and higher requirements for their practicing capabilities and quality. The CPA industry shall keep up with the new trend of reform, development and opening-up of the capital market, have the sense of urgency, opportunities and responsibilities, reach a common understanding, deepen the understanding and take active actions. First is to further enhance the independence; second is to do a good job in the integrated management after the consolidation of accounting firms; third is to improve the risk-oriented audit in the practicing; fourth is to prepare for the cross-border business; fifth is to attach great importance to safeguarding the national economic information security.
Li made unified arrangements for upgrading the accounting supervision and services on the capital market. Firstly, the CSRC will urge the mainland accounting firms to grow stronger and larger and expand overseas markets by promoting them to participate in the pilot audit for H share companies in a steady and orderly way. Secondly, it will continuously upgrade the supervision by further intensifying the spot inspections and special ones, perfecting the jurisdiction responsibility system of accounting supervision, improving the supervision mechanism combining listed companies’ supervision with accounting firms’ spot inspections. Thirdly, it will purify the market-oriented environment by launching the guidance as soon as possible to define the responsibility recognition of accounting firms and accountants and toughening the punishment on major cases and malicious concerted forgery. Fourthly, it will create a better practicing environment for the accounting firms by conducting in a planned way the training of CPAs who practice in the securities and futures businesses and enhancing the service. Fifthly, it will create a positive international supervision environment for the internationalization of domestic accounting firms by further improving the cooperation in accounting supervision with overseas regulators and exploring the ways of cooperative supervision.
Source: China Securities Journal