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2013, May 24

China to Localise Operations of Foreign Accounting Firms

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China to Localise Operations of Foreign Accounting Firms

by CFO Innovation Asia Staff, 14 May 2012
topics:
Accounting and Regulations Auditing
tags:
auditing Ernst & Young KPMG Pricewaterhousecoopers
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Global auditing firms operating in China are now required to hire locally certified Chinese citizens as chief partners.

 

China's finance ministry says auditing firms have three years to comply with the Sino-foreign Joint Venture Accounting Firms Localisation Transformation Programme. Currently, chief partners of all Big Four auditors are headed by foreigners.

 

According to Bloomberg, China is moving to adopt global standards after dozens of companies disclosed auditor resignations or accounting irregularities last year, leading to the suspension or delisting of their shares.

 

Auditing firms contacted by Bloomberg support the new directive. The new rules are "in line with" Ernst & Young's strategy, while PwC China says it has been “actively localising its China practice.”

 

“We will respond positively to the programme by ensuring a smooth and successful transformation of the firm from the existing joint venture structure to Special General Partnership and achieving continued localisation of our firm,” KPMG’s Chinese affiliate, KPMG Huazhen, said in a statement.

 

 

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Big Four Auditors Welcome China’s Rule to Localize Firms
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