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China’s strategy of promoting larger and more competitive accounting firms

China’s strategy of promoting larger and more competitive accounting firms China Journal of Accounting Studies, 2015 Vol. 3, No. 4, 374–375, http://dx.doi.org/10.1080/21697213.2016.1104118 China’s strategy of promoting larger and more competitive accounting firms Since 2010, China’s accountancy profession has vigorously implemented the strategies of promoting larger and more competitive accounting firms and of developing non- audit services. Through policy and financial support, the Chinese Institute of Certified Public Accountants (CICPA) has fostered a series of mergers of accounting firms, guided the accounting firms to improve their governance, directed them to explore new service areas, and enabled them to grow in size and to make progress in building brands, specialisation and internationalisation. These initiatives have achieved remark- able results. In order to carry out the strategy of promoting larger and more competitive account- ing firms to serve Chinese enterprises in ‘going global’, the CICPA has issued and implemented the Opinions on Promoting Larger and More Competitive Accounting Firms, as well as the Opinions on Building the Capacities of the Accountancy Profes- sion to Serve the Financial Industry, introduced a series of policies and measures to support the promotion of larger and more competitive accounting firms, and granted subsidies to qualified accounting firms. The CICPA has also coordinated nine Ministries and Commissions of the State Council to jointly issue the Opinions on Supporting Accounting Firms in Expanding Exports of Accounting Services, which encourages any qualified firms to go global actively, establish international service networks, create glo- bal brands, and serve the strategy of Chinese enterprises ‘going global’. Moreover, the CICPA has released the Guidance on the Governance of Accounting Firms and a model constitution for partnerships to improve accounting firms’ governance. At the same time, it has stipulated the Guiding Opinions on the Regulation and Development of Small and Medium-sized Accounting Firms, which aims to push the small and medium- sized accounting firms to improve their quality and specialisation. The CICPA has also vigorously implemented the new business development strat- egy by proposing, as a breakthrough for the profession, to attain a significant new achievement in development, serve economic and social transformation and upgrading, enhance the usefulness of professional services, and actively explore new avenues of professional services. The CICPA has led the local CPA institutes in cooperating with © 2015 Accounting Society of China China Journal of Accounting Studies 375 local governments, central government departments and professional organisations, in the establishment of 11 accounting service model bases and three accounting service pilot projects relating to national priority fields, regions and projects. Every year, the CICPA releases a Guiding Catalogue of CPA Services, which comprehensively classi- fies and continuously upgrades the service items that the accountancy profession pro- vides for various fields in the economy and society. At present, the CPA service items total 436, of which 271 relate to attestation and 165 relate to consulting. In sum, the non-audit service development strategy has yielded remarkable results in terms of CPAs serving the needs of economic and social development. As a result, the size of the CPA professional service market has grown significantly. In 2014, the revenue of the accountancy profession reached RMB ¥60.3 billion Yuan, an increase of 60.8% compared with RMB ¥37.5 billion Yuan in 2010 with an average annual growth rate of 12.61%. Of the total revenue, the proportion of non-audit service revenue rose from 16% to 30% during this period. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png China Journal of Accounting Studies Taylor & Francis

China’s strategy of promoting larger and more competitive accounting firms

China Journal of Accounting Studies , Volume 3 (4): 2 – Oct 2, 2015
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Publisher
Taylor & Francis
Copyright
© 2015 Accounting Society of China
ISSN
2169-7221
eISSN
2169-7213
DOI
10.1080/21697213.2016.1104118
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Abstract

China Journal of Accounting Studies, 2015 Vol. 3, No. 4, 374–375, http://dx.doi.org/10.1080/21697213.2016.1104118 China’s strategy of promoting larger and more competitive accounting firms Since 2010, China’s accountancy profession has vigorously implemented the strategies of promoting larger and more competitive accounting firms and of developing non- audit services. Through policy and financial support, the Chinese Institute of Certified Public Accountants (CICPA) has fostered a series of mergers of accounting firms, guided the accounting firms to improve their governance, directed them to explore new service areas, and enabled them to grow in size and to make progress in building brands, specialisation and internationalisation. These initiatives have achieved remark- able results. In order to carry out the strategy of promoting larger and more competitive account- ing firms to serve Chinese enterprises in ‘going global’, the CICPA has issued and implemented the Opinions on Promoting Larger and More Competitive Accounting Firms, as well as the Opinions on Building the Capacities of the Accountancy Profes- sion to Serve the Financial Industry, introduced a series of policies and measures to support the promotion of larger and more competitive accounting firms, and granted subsidies to qualified accounting firms. The CICPA has also coordinated nine Ministries and Commissions of the State Council to jointly issue the Opinions on Supporting Accounting Firms in Expanding Exports of Accounting Services, which encourages any qualified firms to go global actively, establish international service networks, create glo- bal brands, and serve the strategy of Chinese enterprises ‘going global’. Moreover, the CICPA has released the Guidance on the Governance of Accounting Firms and a model constitution for partnerships to improve accounting firms’ governance. At the same time, it has stipulated the Guiding Opinions on the Regulation and Development of Small and Medium-sized Accounting Firms, which aims to push the small and medium- sized accounting firms to improve their quality and specialisation. The CICPA has also vigorously implemented the new business development strat- egy by proposing, as a breakthrough for the profession, to attain a significant new achievement in development, serve economic and social transformation and upgrading, enhance the usefulness of professional services, and actively explore new avenues of professional services. The CICPA has led the local CPA institutes in cooperating with © 2015 Accounting Society of China China Journal of Accounting Studies 375 local governments, central government departments and professional organisations, in the establishment of 11 accounting service model bases and three accounting service pilot projects relating to national priority fields, regions and projects. Every year, the CICPA releases a Guiding Catalogue of CPA Services, which comprehensively classi- fies and continuously upgrades the service items that the accountancy profession pro- vides for various fields in the economy and society. At present, the CPA service items total 436, of which 271 relate to attestation and 165 relate to consulting. In sum, the non-audit service development strategy has yielded remarkable results in terms of CPAs serving the needs of economic and social development. As a result, the size of the CPA professional service market has grown significantly. In 2014, the revenue of the accountancy profession reached RMB ¥60.3 billion Yuan, an increase of 60.8% compared with RMB ¥37.5 billion Yuan in 2010 with an average annual growth rate of 12.61%. Of the total revenue, the proportion of non-audit service revenue rose from 16% to 30% during this period.

Journal

China Journal of Accounting Studies – Taylor & Francis

Published: Oct 2, 2015

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