The work conference on accounting regulation in 2009, held recently by the China Securities Regulatory Commission (CSRC) in Zhuhai, Guangdong Province, deployed and arranged the work in the upcoming period after a summary of the achievements in capital market audit and accounting regulation this year and an all-around analysis on the situation confronting the capital market audit and accounting regulation. Li Xiaoxue, Party Committee Member and also Secretary of the Discipline Inspection Committee of the CSRC spoke at the conference.

Li pointed out that the CSRC has, since this year, promoted the listed companies’ corporate governance and internal control and established the communication and coordination mechanism between the accounting firms and the listed companies and securities regulatory bureaus to substantially improve the accounting information quality on the capital market. In addition, it has urged the accounting firms to strengthen their selection, appointment and evaluation of signing accountants, intensified its on-the-spot inspection and post-supervision and tightened its punishment over violations by firms and their practitioners. To adapt to the requirements in the reform and development of capital market, the accounting firms with qualifications for securities and futures businesses perfected their internal governance, strengthened their quality control and improved their practicing quality before completing the annual report audit on 1,622 listed companies, 107 securities companies, 163 futures companies and 61 fund management companies, with their legal duties of audit on annual reports of major capital market players fulfilled earnestly. In the process of IPO re-launch, Grow Enterprise Board introduction and merger, acquisition and restructuring of listed companies, certified public accountants (CPAs), in strict accordance with laws and the CSRC’s requirements, proposed professional audit opinions on the enterprises’ listing and merger, acquisition and reorganization, well cooperated in the promotion of major reform measures on the capital market and made great contributions to the construction of the multi-level capital market system. 

Li also stressed that thanks to the development of China’s capital market, the multi-level capital market system is gradually established and perfected. For the accounting firms practising on the capital market, the further opening-up of the capital market and the implementation of the corporate internal control standard not only represent significant opportunities but also put forward higher requirements for their practising capability and quality. The CPA profession should keep pace with the new trend in the reform, development and opening-up of the capital market and build a strong awareness of opportunity, responsibility and being prepared for the worst while unifying their thinking, raising their awareness and taking active actions. First, the independence shall be improved further. Second, attentions shall be paid to the integrated management of the accounting firm after merger. Third, the risk-oriented audit shall be bettered in practising. Fourth, cross-border services shall be well prepared. Fifth, importance shall be attached to the security of the state economic information.

Concerning the improvement in accounting supervision and service on the capital market, Li made the following arrangements: firstly, the domestic accounting firms’ participation in the pilot audit on H-share companies shall be boosted steadily and orderly to encourage them to grow better, larger and stronger and march into the international market. Secondly, the supervision level shall be elevated by intensifying the on-the-spot and special inspections, perfecting the supervision responsibility system of accounting jurisdiction and improving the supervision mechanism integrating the supervision of listed companies with the on-the-spot inspection of accounting firms. Thirdly, the guidance for recognition of responsibilities of accounting firms and CPAs shall be introduced as soon as possible to specify their respective responsibilities with a view to tightening the punishment to major cases and malicious collaborative cheatings and purifying the market environment. Fourthly, the training for CPAs with qualifications for securities and futures businesses shall be conducted as scheduled to improve the service quality and create a good practicing environment for accounting firms. Fifthly, the cooperation with overseas regulators in accounting supervision shall be improved, with the channels for supervision cooperation explored, to create a better international supervision environment for domestic accounting firms to enter the global market.

At the meeting presided over by Chief Sun Shuming of CSRC Accounting Department, CSRC Chief Accountant Zhou Zhonghui made specific arrangements for the annual report of 2009. Thorough discussions on issues including improving accounting supervision to promote healthy trade development were made by meeting representatives. Attending the meeting were officials from the General Office and the State-owned Assets Supervision and Administration Commission of the State Council, the Chinese Institute of Certified Public Accountants, CSRC departments, regional securities regulatory bureaus, stock and futures exchanges, securities depository and clearing corporations and securities investor protection fund companies as well as heads of the accounting firms with qualifications for securities and futures businesses.

Source: China Securities Regulatory Commission (www.csrc.gov.cn)