(Yicai Global) Aug. 23 -- The Chinese government has brought out new rules to stiffen oversight of accounting firms in a bid to curb financial fraud in the industry.
The document the State Council, or cabinet, issued today was its first aimed at regulating certified public accountants since China’s reform and opening-up began in 1978.
New measures include setting up a reporting mechanism for self-examination and correction and implementing severe punishments for violators in order to regulate auditors engaged in the securities business, according to the document. To assist in the battle against fraud, the measures also aim to strengthen big data analysis used in financial and accounting supervision.
The government will implement cross-border collaboration regarding regulation of accounting and auditing to protect the country’s economic data and increase China’s international credibility, the document also noted.
The document will help strengthen daily regulation and improve the overall health of the industry, the Chinese Institute of Certified Public Accountants said today.
China’s accounting law will be revised as soon as possible to focus on strengthening the punishment of financial fraud and regulating the implementation of financial management, the Ministry of Finance said in a notice on its website. There will be a stricter admission threshold for the sector and more severe penalties for violations such as issuing fake auditing reports.
China had 111,000 practicing CPAs and 8,782 accounting firms at the end of last month, and the sector’s revenue exceeded CNY100 billion (USD15.4 billion) last year, according to finance ministry data.
Editors: Xu Wei, Tom Litting