Compliance Responses and Action Plans

  • Compliance Responses and Action Plans

    IFAC members and associates have provided self-assessment information about the regulatory and standard-setting framework in their countries (Part 1) and their organizations' activities in addressing IFAC's membership requirements (Part 2) as described in the Statements of Membership Obligations. Based on an analysis of this information, they are developing SMO Action Plans for continuous development and improvement.

    Some organizations have qualified to submit SMO Action Plans on a biennial basis by meeting eligibility criteria. These organizations are indicated with an asterisk (*).

    In the interest of transparency and providing information to the profession, regulators, and other stakeholders, all responses and SMO Action Plans are accessible below.

    The Chinese Institute of Certified Public Accountants (CICPA)

     

    Introduction

    The information below has been submitted as part of the IFAC Member Body Compliance program. The Program has two components:

    Part 1: Assessment of the Regulatory and Standard-Setting Framework (provides information about regulatory requirements and standard-setting processes in member body countries); and
    Part 2: Assessment of Compliance (provides information on compliance by member bodies with the Statements of Membership Obligations). Part 2 of the Compliance Program will begin later this year, and the results will also be posted to the website.

    The responses to Part 1 are provided below. IFAC staff has reviewed the responses and, where necessary, validated them with external knowledgeable parties. A list of key terms is available to assist readers in understanding the responses.

    The purpose of this Part 1 Assessment is to collect information on the roles of IFAC member bodies and other organizations (including government, regulatory or other appointed authorities) with respect to:

    1. Setting auditing, accounting, ethics, public sector and education standards; and
    2. Regulating the accountancy profession.

    Sections 1 and 2 of Part 1 contain an introduction and instructions for member body respondents. For this reason, they are not included here, and the responses begin with Section 3.

    Questions or comments may be sent to complianceassessment@ifac.org.


    Section 3 -- Member Body General Information

    1. Country:

      People's Republic of China


    2. Name of member body:
      The Chinese Institute of Certified Public Accountants (CICPA)

      Or please specify name:



    3. Individual responsible for preparation:
      Mr. Weihua Liu and Ms. Jing Liang


    4. Date member body became a member of IFAC:
      Note: Please enter a numeric date (e.g., 12/2001, Month/Year)

      05 / 1997



    Questions 5 - 22 are for internal use only


    Section 3G -- Affiliations


    23. Please list those regional organizations to which your organization belongs (e.g., FEE, CAPA, ECSAFA, IAA, etc.):
      IFAC and CAPA



    Section 4 -- Statutory Framework


    Responses to this section will provide a description of the legal framework governing the commercial aspects of auditing and financial reporting in your country.

    Section 4A -- The Companies Act or Commercial Code


    The following questions concern the Companies Act (the Act) or Commercial Code (the Code) or similar Legal authority in your country. If no Legal authority exists, or the Legal authority does not address particular questions, please indicate "N/A" for Not Applicable.

    24. What is the full name of:
      a). the Act or the Code: Company Law of the People's Republic of China
      b). the Enacting body: (the Standing Committee of) the National Peoples Congress
      c). date the Act or Code came into force: 07 / 1994


    25. How can IFAC obtain a copy of the Act or Code?
      By internet http://www.enonline.sh.cn/ILlook.asp?id=10366 OR http://www.enonline.sh.cn/ILlook.asp?id=10368 By CICPA or Chinese members of IFAC


    26. Is the Act or Code available in English?
      Yes   No


    27. What are the types of entities covered by the Act or the Code?
      Please check all that apply.
      Listed entities   Other (please specify): Joint Stock limited companies (the total capital shall be divided into equal shares, shareholders shall assume liability towards the company to the extent of their respective shareholdings).
      Private companies   Other (please specify):
      Governmental   Other (please specify):
      Not-for-profit   Other (please specify): branches of foreign company


    28. Is there a requirement for the following entities to prepare annual statutory financial statements? If YES, please describe the financial reporting requirements including the accounting standards to be followed.
      Please check all that apply.
        No Yes (If YES, please describe)
      Listed entities All companies (limited liability or joint stock) are required to prepare financial statements. Listed company must prepared financial statements, in compliance with the provisions of the laws
      Private companies All companies are required to prepare financial statements.
      Governmental State owned companies are required to prepare financial statements.
      Not-for-profit
      Other (please describe) Branches of foreign companies Foreign branches must prepare financial statements
      Other (please describe) Joint Stock Limited Companies For joint stock and limited liability companies: NO.156 A listed company must prepared financial statements, in compliance with the provisions of the laws


    29. Is there a statutory requirement for the following entities to be audited? If YES, describe the requirement including the auditing standards to be followed:
      Please check all that apply.
        No Yes (If YES, please describe)
      Listed entities NO.175 At the end of each fiscal year, a company shall prepare its financial and accounting
      Private companies Limited liability companies are required to be audited.
      Governmental Except for some special companies, state-owned companies are required to be audited
      Not-for-profit
      Other (please describe) Branches of foreign companies Required to be audited by the Company Law of P.R. China.
      Other (please describe) Branches of foreign companies Required to be audited by the Company Law of P.R. China.


    30. Are the auditors ("statutory auditors") that are appointed for audits required by the Act or Code ("statutory audits") appointed for a specific period?
      Yes   No
      If YES, please indicate the term of appointment: Year(s)


    31. Who appoints the statutory auditors?
      Please check all that apply.
      Shareholders   Management
      Board of directors   Other (please specify): Approval by general meeting of shareholders required
      Audit committee   Other (please specify):
      Government agency   Other (please specify):


    32. Does the Act or Code require joint auditors for the statutory audit?
      Yes   No
      If yes, please describe the requirement:


    33. Does the Act or Code require the rotation of the auditors or audit firms performing statutory audits?
      Yes   No
      If yes, please describe the requirement:



    Section 4B -- Securities Market Regulations


    Responses to this section will provide a description of the financial reporting and auditing requirements for listed entities in your country.

    34. What are (a) the major items of Legal authority for such requirements, (b) the Enacting body(ies) and (c) the latest amendment date? Please identify the specific articles or sections that pertain to auditing and financial reporting:
    1. the major items of Legal authority for such requirements

      The Company Law of the People's Republic of China

    2. the Enacting body(ies)

      The department of security administration under the State Council

    3. the latest amendment date?

      July 1, 1994, but China is about to revise the Company Law of Peoples Republic of China in the near future.


    35. How can IFAC obtain a copy of the Legal authority?
      Copy of the Company Law of People's Republic of China can be requested.


    36. Is the Legal authority available in English?
      Yes   No


    37. Are there any additional or alternative financial statement reporting requirements for listed entities that are not described in your answer to Question 28?
      Yes   No
      If YES, please describe the requirement:
      NO.152 Where a joint stock limited company applies to have its shares listed or traded, the
      following conditions shall be satisfied: (5) The company must have no records of involvement in serious illegal activities in the recent three years, and its financial accounting statements must contain no false information in the same period.


    38. Are there any additional auditing requirements that apply to listed entities other than those described in your answer to Question 29 (e.g., additional GAAS requirements, additional independence requirements, requirements to report to those charged with governance, etc.)?
      Yes   No
      If YES, please describe the requirement:
      NO.39 Those professional firms and persons who issue an auditing report on the listed company cannot buy the stock of this company within 5 days from the date of its acceptance of the appointment to the date of the report's issuance.


    39. Who appoints the statutory auditors of listed entities?
      Please check all that apply.
      Shareholders   Management
      Board of directors   Other (please specify): Approval by general meeting of shareholders required
      Audit committee   Other (please specify):
      Government agency   Other (please specify):


    40. Are auditors who perform audits of listed entities appointed for a specified period?
      Yes   No
      If YES, please indicate the term of appointment: 5 Year(s)


    41. Are joint auditors required for audits of listed entities?
      Yes   No
      If YES, please describe the requirement:


    42. Is rotation of the auditor or audit firm for audits of listed entities required?
      Yes   No
      If YES, please describe the requirement:
      Regulation of Rotation of the Signing CPA Performing the Auditing of Security and Stocks. NO.3 Except the provision of NO.7, signing CPA cannot provide the auditing service continually for the relevant company beyond 5 years.



    Section 5 -- Auditing Standards


    Responses to this section will provide a description of the legal and professional framework governing audit and other assurance standards in your country. The section focuses on the establishment of such standards. Please indicate the role your organization plays within this framework.

    Section 5A -- Statutory Framework


    43. Please provide the name of the Legal authority and/or self-regulatory rules that establish audit and other assurance standards in your country, the date of the last amendment of such authority or rules and the name of body responsible for setting audit and other assurance standards. If the standards are different for different entities (e.g., listed entities, private companies, governmental bodies, not-for-profit organizations, etc.), please specify the details that apply to each:
      Type of entity Name of
      applicable
      legal
      authority
      Date of last
      amendment
      (e.g. MM/YYYY 06/2001)
      Name of body responsible
      for setting audit and
      other assurance standards
      Listed entity The Law of PRC on CPAs 31/10/1993 Draft by CICPA and approved by Ministry of Finance
      Other (please describe) Listed entities The Law of PRC on Securities 29/12/1998
      Other (please describe) Other entities The Law of PRC on CPAs 31/10/1993 Draft by CICPA and approved by Ministry of Finance
      Other (please describe)

      a. How can IFAC obtain copies of these documents?

      Contact CICPA

      b. Are the documents available in English?
      Yes   No


    Section 5B -- Standard-Setting (Draft by CICPA and approved by Ministry of Finance)


    44. For Draft by CICPA and approved by Ministry of Finance, please indicate the nature of the body (i.e., whether it is part of a government ministry or department, an agency appointed by government, a private organization established by the profession, or other [please describe]) and the name of the standards.
      a. Nature of body

      An agency appointed by the government

      b. Name of standards



    45. How many voting members does the standard-setting body have?
      31


    46. Are the members of the standard-setting body involved on a voluntary basis or employed by the standard-setting body?
      Voluntary  
      Employed  
      Both - Please describe:


    47. What are the criteria considered in selecting members of the standard-setting body (e.g., best person for the job, sector of the profession, private and public members, academic, geographical representation, etc.)?
      Experts from relevant government departments, accounting firms, research institutes, universities, etc.


    48. Who appoints these members (e.g., member body, government, user, regulator, etc.)?
      CICPA


    49. What is the term of appointment for members?
      1 Year(s)


    50. For how many years has the standard-setting body been in existence?
      11 Year(s)


    51. Please indicate the budget in US$ of the standard-setting body for the last fiscal year:
      Note: Please enter a whole number using commas (e.g., 4,000,000)

      100,000

      Please enter the exchange rate used to calculate this number.

      Note: Please enter a decimal amount (e.g., 4.0027)

      8.27



    52. To what entity is the standard-setting body accountable?
      Ministry of Finance


    53. Describe the due process followed by the standard-setting body. Please include explanations of the following:
    1. public exposure of standards

      The China Independent Auditing Standards (CIAs) group proposes a list of potential topics on auditing standards for selection. After discussing
      these with the advisory groups of experts and receiving comments from relevant parties, the CIAs group revises the proposed list. The revised list is then submitted to the Ministry of Finance for approval. Based on the approved list of topics on auditing standards, the CIASs group conducts research and studies and prepares initial drafts. The CICPA solicits comments from the advisory groups of experts and relevant parties. The CIASs group revises the initial drafts based on these comments and the CICPA submits the resulting proposed exposure drafts to the Ministry of Finance.

      The Ministry of Finance issues exposure drafts to solicit comments extensively from relevant
      departments, local branches of the CICPA, accounting firms, research institutes and universities, etc.


    2. accessibility of meetings (i.e., public or private)

      public

    3. approval process for final standards (i.e., majority required to approve final standards)

      The CIASs group revises the exposure drafts to take account of feedback from different parties. The CICPA solicits comments from the advisory groups of experts and relevant parties and then finalizes The revised drafts. The Ministry of Finance approves the issuance of the CIASs.

    4. other relevant due process activities



    54. Approximately how many days per year does the standard-setting body meet in full session (including teleconferences)?
      45 Day(s)


    Section 5B -- Standard-Setting (National Peoples Congress)


    44. For National Peoples Congress, please indicate the nature of the body (i.e., whether it is part of a government ministry or department, an agency appointed by government, a private organization established by the profession, or other [please describe]) and the name of the standards.
      a. Nature of body

      Government Body

      b. Name of standards



    45. How many voting members does the standard-setting body have?


    46. Are the members of the standard-setting body involved on a voluntary basis or employed by the standard-setting body?
      Voluntary  
      Employed  
      Both - Please describe:


    47. What are the criteria considered in selecting members of the standard-setting body (e.g., best person for the job, sector of the profession, private and public members, academic, geographical representation, etc.)?


    48. Who appoints these members (e.g., member body, government, user, regulator, etc.)?


    49. What is the term of appointment for members?
      Year(s)


    50. For how many years has the standard-setting body been in existence?
      Year(s)


    51. Please indicate the budget in US$ of the standard-setting body for the last fiscal year:
      Note: Please enter a whole number using commas (e.g., 4,000,000)

      Please enter the exchange rate used to calculate this number.

      Note: Please enter a decimal amount (e.g., 4.0027)



    52. To what entity is the standard-setting body accountable?


    53. Describe the due process followed by the standard-setting body. Please include explanations of the following:
    1. public exposure of standards



    2. accessibility of meetings (i.e., public or private)



    3. approval process for final standards (i.e., majority required to approve final standards)



    4. other relevant due process activities



    54. Approximately how many days per year does the standard-setting body meet in full session (including teleconferences)?
      Day(s)



    Section 6 -- Ethics


    Responses to questions in this section will provide a description of the legal and professional framework governing ethics standards for accountants in your country. This section focuses on the establishment of such standards. Please indicate the role your organization plays within this framework.

    Section 6A -- Statutory Framework


    55. For each of the following types of professionals, please indicate the name of the Legal authority and/or self-regulatory rules establishing ethics standards for accountants and auditors in your country, the date of the last amendment of such authority or rules and the name of body responsible for setting the ethics standards.
      Type of professional covered Name of
      applicable
      legal
      authority
      Date of last
      amendment
      (e.g. MM/YYYY 06/2001)
      Name of body responsible
      for setting ethics standards
      Professional Accountants in Public Practice The Law of PRC on CPAs 31/10/1993 CICPA
      Professional Accountants in Business The Law of PRC on CPAs 31/10/1993 CICPA
      Professional Accountants in the Public Sector The Law of PRC on CPAs 31/10/1993 CICPA
      Other (please describe)

      a. How can IFAC obtain copies of these documents?

      Contact CICPA

      b. Are the documents available in English?
      Yes   No


    Section 6B -- Standard-Setting (CICPA)


    56. For CICPA, please indicate the nature of the body (i.e., whether it is part of a government ministry or department, an agency appointed by government, a private organization established by the profession, or other [please describe]) and the name of the standards.
      a. Nature of body

      An agency appointed by government

      b. Name of standards

      Standards on Professional Ethics


    57. How many voting members does the standard-setting body have?
      31


    58. Are the members of the standard-setting body involved on a voluntary basis or employed by the standard-setting body?
      Voluntary  
      Employed  
      Both - Please describe:


    59. What are the criteria considered in selecting members of the standard-setting body (e.g., best person for the job, sector of the profession, private and public members, academic, geographical representation, etc.)?
      Experts from relevant government departments, accounting firms, research institutes, universities, etc.


    60. Who appoints these members (e.g., member body, government, user, regulator, etc.)?
      CICPA


    61. What is the term of appointment for members?
      1 Year(s)


    62. For how many years has the standard-setting body been in existence?
      11 Year(s)


    63. Please indicate the budget in US$ of the standard-setting body for the last fiscal year:
      Note: Please enter a whole number using commas (e.g., 4,000,000)

      100,000

      Please enter the exchange rate used to calculate this number.

      Note: Please enter a decimal amount (e.g., 4.0027)

      8.27



    64. To what entity is the standard-setting body accountable?
      Ministry of Finance


    65. Describe the due process followed by the standard-setting body. Please include explanations of the following:
    1. public exposure of standards

      Please see 53a relating to the CICPA.

    2. accessibility of meetings (i.e., public or private)

      public

    3. approval process for final standards (i.e., majority required to approve final standards)

      please see 53c Please see 53a relating to the CICPA.

    4. other relevant due process activities



    66. Approximately how many days per year does the standard-setting body meet in full session (including teleconferences)?
      30 Day(s)



    Section 7 -- Education


    Responses to questions in this section will provide a description of how education requirements for the profession are established. Please indicate the role your organization plays within this process.

    Section 7A -- Education Requirements


    67. Please describe in general terms the education system in your country including the different stages of education from early childhood education through to tertiary level study. Please indicate which aspects / levels are compulsory as part of the national education system:
      The primary school starts from 6 or 7 to 12 or 13 years old and the stage of education for middle school begins from 12 or 13 to 17 or 18. The higher education age is from 17 or 18 years old and there is no limitation for the age of adults of the job-training. The fundamental time of compulsory education system is 9 years long period from 7 to 13.


    68. Is there a legal authority or regulation that specifies the requirements for an individual to operate as an accountant or auditor in your country?
      Yes   No

      If YES, please provide the name and describe the requirements, including any relating to education, experience or qualifications.

      Accounting Department in the Ministry of Finance and the CICPA are the legal authorities to specify the requirements for an individual to operate as an accountant or auditor. The Accounting Law of the PRC (regulate accounting work and the behavior of the accounting personnel) and Law of the PRC on CPAs (regulates the public accounting profession)provide the details of education , experience Qualifications concerning a qualified accountant or CPA.


    69. Please select from below all the relevant key levels of requirements to obtain certification from your member body (i.e. to qualify as a certified or chartered accountant) and provide a general description of the requirement.
      Academic requirements
      An individual has a university or a college diploma. Regardless of the type of subject matter diploma, the person can take part in the entry examination of CPA. There are not any academic requirements at the entry level to obtain certification of an accountant within enterprises.
      Professional examinations
      Five examinations for CPAs: accounting, auditing, taxation laws, economic laws, financial management and cost management
      Practical experience
      After passing the examinations the individual should have 2 years experiences in a firm for auditing practice
      Final qualifying examination
      Other (please describe) Special qualification for listed company
      A qualified CPA must pass the examination of special certification for auditing of listed company. This examination stopped in 2003 - see Q81.


    70. Which of the following arrangements best describes who establishes the education requirements for the accounting profession in your country? Please select one option.
      A government ministry, department or agency establishes education requirements for the accounting profession with no additional requirements set by the member body(ies).
      A government ministry, department or agency establishes minimum education requirements for the accounting profession, and member body(ies) supplement these requirements.
      Member body(ies) establishes the education requirements for the accounting profession.
      Other (please describe)


    71. Please provide the name(s) of the relevant body in the government ministry, department, agency and / or member body who establishes the education requirements.
      National Education Committee, Accounting Department in the Ministry of Finance, Examination and Continuing Education Committee within Ministry of Finance and CICPA

    1. A general description of the role of the relevant body(ies) including how it operates and its due process in establishing the education requirements.

    2. How many voting members does the relevant body(ies) have

      All the members in CE Committee of CICPA and Examination Committee of CPA of Ministry of Finance are recommended.

    3. Are the members of the relevant body(ies) involved on a voluntary basis or employed by the standard-setting body?
      Voluntary  
      Employed  
      Both - Please describe:

    4. For how many years has the body been in existence?

      Year(s)


    72. How would you describe the authority that the education requirements have?
      Requirements are legally-based
      Requirements are set in the constitution, by-laws or other rules of the relevant body(ies).
      Requirements are set in member body(ies) policy document(s).
      Other (please describe)

    72 a. How can IFAC obtain copies of these documents?

    72 b. Are these documents available in English?
      Yes   No


    73. Are the education requirements for accountants and auditors the same throughout your country, or do they differ among regions, provinces or states?
      Same   Different
      If different, please briefly describe the main differences:


    74. Please indicate the scenario that best describes who delivers the education and examination process for members of the profession. Please only select one option.
      The education program and final examination are delivered by the member body.
      The education program and final examination are delivered by the member body and other education institutions (e.g., universities, colleges, and others).
      The education program and final examination are delivered by education institutions (e.g., universities, colleges, and others).
      Other (please explain)


    75. Once qualified as a member of your professional body, can members offer their services directly to the public?
      Yes   No



    Section 7B -- Licensing


    76. Are there licensing requirements for auditors in your country?
      Yes (continue with Question 77)   No (proceed to Section 8)


    77. Who sets the requirements to obtain a license?
      The Ministry of Finance of the State Council and CICPA.

      CICPA is responsible for licensing administration from the level of the industry, including setting measure and policy. The specific work of licensing is conducted by the local CPA institute and the results should be reported to the Ministry of Finance.


    78. What are the requirements to obtain a license (please select all relevant requirements.)?
      Academic study specific for obtaining a license
      Practical experience
      Licensing examination
      Final qualifying examination
      Other (please describe)


    79. Are there ongoing requirements to retain a license?
      Yes   No

      If YES, please select all relevant requirements.
      Continuing professional development
      Re-examination
      Other (please specify):


    80. What entity grants the license?
      The Ministry of Finance


    81. Describe any additional licensing requirements for auditors of listed entities (e.g., additional education requirements, registration, etc.).
      Accounting firms need to have a special qualification to audit listed companies, so long as the CPA is in that firm that has the above-mentioned qualification, he is permitted to audit all entities including listed companies.



    Section 8 -- Public Sector Accounting Standards


    Responses to this section will provide a description of the legal and professional framework governing public sector accounting standards in your country. The section focuses on the establishment of such standards. Please indicate, where appropriate, the role of your organization within this framework.

    Section 8A -- Statutory Framework


    82. Please provide the name of the Legal authority and/or self-regulatory rules establishing public sector accounting standards in your country, the date of last amendment and the name of the body responsible for setting public sector accounting standards. If the standards are different for different entities (e.g., whole of government, ministry/department, statutory authority/agency, profit entity owned by government, state governments, local governments, other [please specify]), please specify the details that apply to each.
      Type of entity Name of
      legal
      authority
      Date of last
      amendment
      (e.g. MM/YYYY 06/2001)
      Name of body responsible
      for setting public sector
      accounting standards
      Whole of government Accounting System for the General Budget 11/2001 Ministry of Finance (MOF)
      Ministry/department Accounting System for Government Agencies 02/1998 Ministry of Finance (MOF)
      Statutory authority/agency Accounting System for Institutions 09/2003 Ministry of Finance (MOF)
      Profit entity owned by government Accounting System for Business Enterprises 04/2003 Ministry of Finance (MOF)
      State governments
      Local governments
      Other (please describe)
      Other (please describe)

      a. How can IFAC obtain copies of these documents?

      IFAC can obtain copies of these documents by mail or e-mail. The mail and e-mail address are as fllows: Accounting Regulatory Department, Ministry of Finance, Sanlihe, Xicheng District, P.R. China chengxiaojia@mof.gov.cn

      b. Are the documents available in English?
      Yes   No


    Section 8B -- Standard-Setting (Ministry of Finance (MOF))


    83. For Ministry of Finance (MOF), please indicate the nature of the body (i.e., whether it is part of a government ministry or department, an agency appointed by government, a private organization established by the profession, or other [please describe]) and the name of the standards.
      a. Nature of body

      Government

      b. Name of standards

      Accounting System for the General Budget


    84. How many voting members does the standard-setting body have?
      N/A


    85. Are the members of the standard-setting body involved on a voluntary basis or employed by the standard-setting body?
      Voluntary  
      Employed  
      Both - Please describe:


    86. What are the criteria considered in selecting members of the standard-setting body (e.g., best person for the job, sector of the profession, private and public members, academic, geographical representation, etc.)?
      Best person for the job


    87. Who appoints these members (e.g., member body, government, user, regulator, etc.)?
      Government


    88. What is the term of appointment for members?
      Year(s)


    89. For how many years has the standard-setting body been in existence?
      Year(s)


    90. Please indicate the budget in US$ of the standard-setting body for the last fiscal year:
      Note: Please enter a whole number using commas (e.g., 4,000,000)

      N/A

      Please enter the exchange rate used to calculate this number.

      Note: Please enter a decimal amount (e.g., 4.0027)

      N/A



    91. To what entity is the standard-setting body accountable?
      The State Council.


    92. Describe the due process followed by the standard-setting body. Please include explanations of the following:
    1. public exposure of standards

      An Exposure Draft is released for each standard for public comments before the standard is finished.

    2. accessibility of meetings (i.e., public or private)

      Some of the meetings are open to public, while some are private.

    3. approval process for final standards (i.e., majority required to approve final standards)

      The Ministry of Finance has the power to approve final standards. There is no voting system in the approval process.

    4. other relevant due process activities

      N/A


    93. Approximately how many days per year does the standard-setting body meet in full session (including teleconferences)?
      50 Day(s)



    Section 9 -- Private Sector Accounting Standards


    Responses to the questions in this section will provide a description of the legal, statutory and professional framework governing private-sector accounting standards in your country. The section focuses on the establishment of such standards. Please indicate what role your organization plays within this framework.

    Section 9A -- Statutory Framework


    94. Please provide the name of the Legal authority and/or self-regulatory rules that establish private-sector accounting standards in your country, the date of last amendment, and the name of the body responsible for setting private sector accounting standards. If the standards are different for different entities (for example, listed entities, private companies, governmental organization, not for profit organizations, etc.), please specify the requirements that apply to each.
      Type of entity Name of legal
      authority or
      applicable
      rules
      Date of last
      amendment
      (e.g. MM/YYYY 06/2001)
      Name of body responsible
      for setting private sector
      accounting standards
      Listed entity Accounting Standards for Business Enterprises 04/2003 Ministry of Finance (MOF)
      Other (please describe) Financial Institutions Accounting System for Financial Institutions 11/2001 Ministry of Finance (MOF)
      Other (please describe) Small Enterprises Financial Institutions Accounting System for Small Enterprises 06/2004 Ministry of Finance (MOF)
      Other (please describe)
      Other (please describe)

      a. How can IFAC obtain copies of these documents?

      Mail Address:
      Accounting Regulatory Department, Ministry of Finance, Sanlihe, Xicheng District
      Beijing, China, 100820

      Email: feng.sp@mof.gov.cn


      b. Are the documents available in English?
      Yes   No


    Section 9B -- Standard-Setting (Ministry of Finance (MOF))


    95. For Ministry of Finance (MOF), please indicate the nature of the body (i.e., whether it is part of a government ministry or department, an agency appointed by government, a private organization established by the profession, or other [please describe]) and the name of the standards.
      a. Nature of body

      Government

      b. Name of standards

      Accounting Standards for Business Enterprises
      Accounting System for Financial Institutions
      Accounting System for Small Enterprises


    96. How many voting members does the standard-setting body have?
      N/A


    97. Are the members of the standard-setting body involved on a voluntary basis or employed by the standard-setting body?
      Voluntary  
      Employed  
      Both - Please describe:


    98. What are the criteria considered in selecting members of the standard-setting body (e.g., best person for the job, sector of the profession, private and public members, academic, geographical representation, etc.)?
      N/A. (Ministry of Finance is a part of the State Council of PRC, which is the financial department of the State Council and takes charge of the accounting affairs throughout the country according to the Accounting Law of PRC.


    99. Who appoints these members (e.g., member body, government, user, regulator, etc.)?


    100. What is the term of appointment for members?
      Year(s)


    101. For how many years has the standard-setting body been in existence?
      Year(s)


    102. Please indicate the budget in US$ of the standard-setting body for the last fiscal year:
      Note: Please enter a whole number using commas (e.g., 4,000,000)

      Please enter the exchange rate used to calculate this number.

      Note: Please enter a decimal amount (e.g., 4.0027)



    103. To what entity is the standard-setting body accountable?
      The State Council of PRC


    104. Describe the due process followed by the standard-setting body. Please include explanations of the following:
    1. public exposure of standards

      Exposure Drafts (EDs) of each Standard is released for public comments before the standard is finished.

    2. accessibility of meetings (i.e., public or private)

      Some meeting are open.

    3. approval process for final standards (i.e., majority required to approve final standards)

      The final Standards should be approved by the Ministry of Finance.

    4. other relevant due process activities



    105. Approximately how many days per year does the standard-setting body meet in full session (including teleconferences)?
      Day(s)



    Section 10 -- Monitoring (Quality Assurance) and Enforcement


    Responses to the questions in this section will provide a description of the legal and professional framework governing regulation of the profession in your country. Please indicate what role your organization plays within this framework.

    Section 10A -- Securities Market Regulatory Authority


    106. Name the authority that regulates the securities market:
      China Securities Regulatory Commission (CSRC)


    107. What responsibilities does this organization have for monitoring and enforcing compliance with accounting, reporting or auditing requirements? Please identify the Legal authority that establishes that responsibility:
      Formulating the rules of accountancy; information releases of listed company; setting administrative punishment and guidance to accounting firms engaged in services to entities with securities; supervising and examining the issuing of securities and transacting information, etc. The State Council authorizes the CSRC.


    108. Briefly describe the role of the regulatory authority as it relates to the following:
    1. regulation of the audit profession

      CSRC is the principal administrative body relating to audits of entities with listed securities, and the Ministry of Finance also has this right. Both of them have the right of administrative punishment.

      The National Audit Office is a comprehensive body in charge of controlling public finance and monitoring the economy, including the audit of state-owned enterprises. The National Audit Office has the authority to supervise the auditing affairs, too, but it does not have the right to set administrative punishment.

      The CICPA has the right of self-regulating.


    2. accounting and auditing standard-setting

      The Ministry of Finance has the right of formulating accountancy rules.

      The rules are sketched out by the CICPA and approved by the Ministry of Finance.


    3. review of financial statements prepared by listed entities, and monitoring of their compliance with the accounting and disclosure requirements

      The CICPA is the major supervisor on this matter.



    Section 10B -- Stock Exchange


    109. Name the four largest stock exchangers (by market capitalization) and whether it is organized as a profit or not-for-profit organization:
      Profit Not
      for
      profit
      Stock Exchange
      Shanghai Stock Exchange
      Shenzhen Stock Exchange



    Section 10B -- Stock Exchange
    Shanghai Stock Exchange Details


    110. For Shanghai Stock Exchange, is there a mechanism at the stock exchange(s) for monitoring and enforcing financial reporting, accounting and auditing of listed entities?
      Yes   No

      If YES, please describe the following:

    1. How the monitoring and enforcement of financial reporting, accounting and auditing is conducted.

      To establish a department to supervise listed companies.

    2. The consequences of non-compliance with the financial reporting, accounting or auditing requirements.

      Public accusation, special disposal of stock transaction and report to the relating department of government

    3. How enforcement actions are administered.

      All the actions listed in the answer to question b are implemented by the stock exchange.


    Section 10B -- Stock Exchange
    Shenzhen Stock Exchange Details


    110. For Shenzhen Stock Exchange, is there a mechanism at the stock exchange(s) for monitoring and enforcing financial reporting, accounting and auditing of listed entities?
      Yes   No

      If YES, please describe the following:

    1. How the monitoring and enforcement of financial reporting, accounting and auditing is conducted.

      see Shanghai Stock Exchange 110a

    2. The consequences of non-compliance with the financial reporting, accounting or auditing requirements.

      see Shanghai Stock Exchange 110b

    3. How enforcement actions are administered.

      see Shanghai Stock Exchange 110c



    Section 10C -- Regulatory Oversight of the Accounting Profession


    111. Has an audit profession oversight body been established (e.g., to oversee the external quality assurance review process, etc.)?
      Yes   No

      If NO, proceed to the next section.

      If YES, please describe :

    1. What are the name and duties of the oversight body?

      Administrative oversight and inspection.

    2. The number of members on the oversight body

      No details for this question.

    3. Its powers

      Review the working paper of all the practice of CPAs and make a copy of that, including the inspection of CPAs?clients and punishment of firms and individuals.

    4. How the oversight body conducts or oversees a program of inspections to assess the degree of compliance of each audit firm/auditor with applicable auditing standards and regulations

      Issue the inspecting report through inspections

    5. The sanctions the oversight body may impose in the event of non-compliance

      Administrative punishment

    6. How the oversight body is accountable to any public institution or body

      Inspections (records of practice)


    Section 10D -- Banks Regulatory Authority


    112. Name the authority that regulates the banks and similar financial institutions. Discuss how this authority differentiates between accounting requirements for regulatory reporting and general purpose external financial reporting:
      China Banking Regulatory Commission. All Chinese financial institutions practise in accordance with the Accounting System of Financial Enterprises, therefore, theres no essential difference. But, the requirements of regulatory departments are more detailed than general financial accounting report.


    113. Discuss briefly the legal requirements with respect to monitoring and enforcement by the regulatory authority of accounting and auditing standards that apply to the banks and similar financial institutions:
      1. require financial institutions to submit their audited accounting statements and relevant materials regularly. 2. practice indirect supervision over the financial institutions through assets sufficiency rate inspection, profit-making ability inspection and assets quality inspection.


    114. Briefly describe the role of the regulatory authority as it relates to the following:
    1. regulation of the audit profession

      The Ministry of Finance is the main oversight department over the auditing profession. The China Banking Regulatory Commission (CBRC) oversees the auditing work of the financial institutions. In practice, the CBRC coordinates with MOF to ensure consistency of the inspection.

    2. accounting and auditing standard-setting

      MOF is responsible for setting accounting and auditing standards for financial institutions. CBRC formulate supervisory rules and regulations or additional rules governing the banking institutions if needed.

    3. review of financial statements prepared by listed entities

      Conduct on-site examination and off-site surveillance of the banking institutions, and take enforcement actions against rule-breaking behaviors

    4. enforcement of accounting, reporting and auditing requirements

      CBRC oversees financial institutions to comply with accounting standards, auditing standards, rules for preparing financial reports that formulated by governing departments, and take enforcement actions against rule-breaking behaviors.



    Section 10E -- Non-Banking Financial Institutions Regulatory Authority


    115. Name the regulatory authority(ies) responsible for monitoring compliance with and enforcing accounting, reporting and auditing requirements imposed on non-banking institutions.
      China Banking Regulatory Commission


    116. What is the source of Legal authority of the regulatory authority(ies)?
      The Law of the Peoples Republic of China on Banking Regulation and Supervision, and The Law of PRC on Commercial Banks


    117. Briefly describe the role of the regulatory authority(ies) as it relates to the following:
    1. regulation of the audit profession

      Same as 114a

    2. accounting and auditing standard-setting

      Same as 114b

    3. review of financial statements prepared by listed entities

      only review listed banking institutions

    4. enforcement of accounting, reporting and auditing requirements

      Same as 114d



    Section 10F -- Insurance Companies Regulatory Authority


    118. Name the regulatory authority responsible for monitoring compliance with and enforcing accounting, reporting and auditing requirements imposed on insurance companies.
      China Insurance Regulatory Commission (CIRC), Ministry of Finance, National Audit Office and China Securities Regulatory Commission


    119. What is the source of Legal authority of the regulatory authority(ies)?
      Insurance Law of the Peoples Republic of China


    120. Briefly describe the role of the regulatory authority(ies) as it relates to the following
    1. regulation of the audit profession

      The CIRC does not regulate the audit profession directly.

    2. accounting and auditing standard-setting

      The CIRC is not responsible for accounting and auditing standards setting.

    3. review of financial statements prepared by listed listed entities

      The CIRC has the right to review the financial statements prepared by insurance companies, no matter listed or not. Other listed companies are not included.

    4. enforcement of accounting, reporting and auditing requirements

      The CIRC holds the responsibility of supervising and inspecting the implementation of the accounting and reporting standard by insurance companies, insurance asset managing companies and insurance intermediary institutes, but it is not responsible for the supervision of other companies.



    Section 10G -- Other Regulatory Authority


    121. Name any other regulatory authority(ies) responsible for monitoring compliance with and enforcing accounting, reporting and auditing requirements.
      National Audit Office


    122. What is the source of Legal authority of each regulatory authority?


    123. Briefly describe the role of the regulatory authority(ies) as it relates to the following
    1. regulation of the audit profession

      supervision and inspection

    2. accounting and auditing standard-setting

      not involved

    3. review of financial statements prepared by listed listed entities

      selectively examine the financial statements prepared by some listed entities

    4. enforcement of accounting, reporting and auditing requirements

      no specified responsibility for this part



    Section 10H -- Quality Assurance


    124. Does any organization of professional accountants/auditors organize a program of quality assurance review to monitor compliance with accounting, reporting and auditing requirements?
      Yes   No

      If NO, proceed to next Section.

      If YES, briefly describe the monitoring and enforcement mechanism.

      The practice inspection system of CPA firms implemented by CICPA



    125. Under what authority does the organization conduct the program of quality assurance review?


    126. Who performs the review (e.g., one firm reviewing another firm, staff from the national professional organization, contractors, or a combination of these)?
      CICPA and the local institutes of CPAs



    Section 10 I -- Investigation and Discipline


    127. Is there a process for investigating and disciplining the accounting profession in your country?

    128. Which of the following best describes the responsibility for the investigatory and disciplinary function in your country?
      Government or other agencies are solely responsible for this function.
      Government or other agencies have this responsibility, but the member body or bodies participate in the process.
      Government formally delegates this function to the member body or bodies, to exercise on its behalf.
      Member body or bodies have separate and independent processes that operate alongside processes of legal authorities.
      Other (please explain)


    129. Please indicate the name of the body or bodies responsible for investigation and discipline.
      Ministry of Finance and China Securities Regulatory Commission (CSRC).


    Responses to the remaining questions in this Section are required if your organization has responsibility for investigation and disciplinary actions.

    130. How many voting members does the body have?
      zero


    131. Are the members of the body involved on a voluntary basis or employed by the standard-setting body?
      Voluntary  
      Employed  
      Both - Please describe:


    132. What are the criteria considered in selecting members of the body (e.g., best person for the job, sector of the profession, private and public members, academic, geographical representation, etc.)?
      the best person for the job


    133. Who appoints these members (e.g., member body, government, user, regulator, etc.)?
      Government


    134. What is the term of appointment for members?
      Year(s)


    135. For how many years has the body been in existence?
      14 Year(s)


    136. Please indicate the budget in US$ of the body for the last fiscal year.
      Note: Please enter a whole number using commas (e.g., 4,000,000)

      Please enter the exchange rate used to calculate this number.

      Note: Please enter a decimal amount (e.g., 4.0027)

      (specify currency)



    137. To what entity is the body accountable?
      the State Council


    138. Approximately how many days per year does the body meet in full session (including teleconferences)?
      Day(s)



     

     

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