More than half of China's listed companies would have exaggerated profits in their 2005 annual reports if certified accountants had not stopped them, the China Institute of Certified Public Accountants (CICPA) said.

In a report released Thursday, the CICPA said 776 Chinese listed firms out of a total of 1,371 were ready to declare 38.8 billion yuan (4.9 billion U.S. dollars) of fictive profits in their 2005 draft annual reports if accountants had not intervened.

Certified public accountants also struck 109.4 billion yuan of asset value from the books of 590 listed firms.

According to CICPA sources, all accounting firms are required to file a copy of their auditing reports with CICPA. The CICPA report was compiled from an analysis of these reports.

CICPA officials said the report shows that China's certified public accountants have become bolder and more professional in fulfilling their duties.

False accounting has been a thorny issue in China. The Ministry of Finance said earlier this week that its probe of 39 property firms shows that these firms failed to report profits totaling 3.3 billion yuan in 2005.

As property prices soar in China, property firms have vehemently denied reports that their profit level is much higher than most industries.

The probe shows that the 39 firms had a profit margin of 26.79 percent rather than the 12.22 percent shown in their accounting books.

Source: Xinhua