China's Accounting Business to be More Open: Official

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Last updated at: (Beijing Time) Thursday, November 21, 2002

China's Accounting Business to be More Open: Official

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Entering into China's accounting services market becomes easier along with China's accession to the World Trade Organization (WTO), Feng Shuping, assistant minister of China's Ministry of Finance, said Wednesday in Hong Kong.

China will honor its WTO commitments in relation to accounting services, the Chinese official promised at the China Forum of the 16th World Congress of Accountants.

The commitments include allowing foreigners who have obtained CPA (certified public account) licenses from Chinese competent authority to set up accounting practices and allowing foreign accounting firms to establish member firms in China.

In addition, national treatments are granted in all aspects except for certain restrictions on the entry and residence of foreign individuals.

"This shows that Chinese CPAs of foreign nationality are treated on the same basis as domestic Chinese CPAs. Their audit reports have the same legality as those of their Chinese counterparts, and their practicing activities are equally protected under Chinese laws," Feng said.

She said a sound and comprehensive system of Chinese accounting standards will be built up in about three years and China will take into consideration China's objective conditions and continue to draw references to the international accounting standards (IAS) in the process of formulating accounting standards.

As a result of the accounting reform over the recent years, China has made significant progress in harmonizing with international accounting standards, Feng said.

The number of adjustments required to convert the financial report prepared under Chinese Accounting Standards for listing in Hong Kong or the Chinese mainland to an IAS report has reduced over the years, she said.

According to the Chinese official, there have been 11 international or foreign accounting firms setting up 17 offices in seven cities. Eleven international accounting firms have developed 26 member offices across 14 Chinese cities. Twenty-three eligible overseas members of the Chinese Institute of Certified Public Accountants have been approved to practice in China.

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