China's mainland

The financial reporting framework in the People’s Republic of China is established under the Accounting Law of the People’s Republic of China (as amended in 2017), which sets out the legal requirements for entities to maintain accounting records and prepare financial statements in accordance with the unified national accounting system. Under the law, the Ministry of Finance (MoF) is the authority responsible for establishing accounting standards for business enterprises and public sector entities. As part of the standard-setting framework, the Ministry of Finance is supported by the Chinese Accounting Standards Commission, which serves as an advisory body on accounting matters.

Listed and other domestically publicly accountable entities are required to apply the Accounting Standards for Business Enterprises, which are substantially converged with the International Financial Reporting Standards (IFRS). The Ministry of Finance continues to update these standards to maintain convergence with IFRS Accounting Standards. Small entities may apply a separate domestic reporting framework, including the accounting standards for small entities, which were developed with reference to the IFRS for Small and Medium-sized Entities (SMEs); however, IFRS and the IFRS for SMEs are not directly permissible for statutory application in the jurisdiction.

Additional financial reporting and disclosure requirements apply to regulated entities, including listed companies, banks, insurance companies, and other financial institutions. The Securities Law of the People’s Republic of China establishes reporting and disclosure requirements for listed companies under the oversight of the China Securities Regulatory Commission (CSRC). Listed companies are required to publish audited annual financial statements through designated reporting channels and public disclosure platforms in accordance with securities regulations.

The statutory audit framework is established through the Company Law of the People’s Republic of China, the Law of the People’s Republic of China on Certified Public Accountants, the Securities Law of the People’s Republic of China, and related regulations. Audits of listed companies and other entities subject to statutory audit must be conducted by qualified accounting firms and signed by certified public accountants licensed in China.

Under the Law of the People’s Republic of China on Certified Public Accountants, the Chinese Institute of Certified Public Accountants (CICPA) has the legal authority to draft national auditing and professional standards, subject to approval by the Ministry of Finance. China’s auditing standards have been developed through a convergence approach with the International Standards on Auditing (ISA). The Chinese Standards on Auditing have been updated to reflect the latest International Standards on Auditing (ISA) issued by the International Auditing and Assurance Standards Board (IAASB), including the current quality management framework aligned with International Standard on Quality Management 1 (ISQM 1), International Standard on Quality Management 2 (ISQM 2), and the revised ISA 220.

There is one professional designation in the People’s Republic of China—Certified Public Accountant (CPA)—which is protected and regulated under the Law of the People’s Republic of China on Certified Public Accountants. The law establishes the legal framework for the regulation of the profession, including entry requirements, rights and responsibilities of certified public accountants, the scope of services that may be provided, and sanctions applicable in cases of non-compliance with professional standards and legal requirements.

Under the law, the Ministry of Finance (MoF) supervises the national professional accountancy organization, the Chinese Institute of Certified Public Accountants (CICPA), which in turn oversees the local and provincial CPA institutes operating throughout the country.

To obtain the designation of Certified Public Accountant, candidates are required to sit for the national uniform CPA examination. The Ministry of Finance determines the form and content of the examination, while the Chinese Institute of Certified Public Accountants is legally authorized to administer it. Candidates who have completed at least a two-year college program at a recognized institution, or who hold an intermediate technical qualification in accounting or a related field, are eligible to sit for the examination. Individuals who successfully pass the examination and complete two years of relevant audit experience may then apply for membership through a local CPA institute.

Membership in a local CPA institute is mandatory for all certified public accountants and automatically confers membership in the Chinese Institute of Certified Public Accountants. The local CPA institutes are responsible for reviewing and approving membership applications, subject to validation by the Ministry of Finance, after which CPA certificates may be issued in accordance with the prescribed procedures. Provincial finance departments are responsible for issuing licenses to accounting firms authorized to practice in China.

The regulatory responsibilities of the Chinese Institute of Certified Public Accountants include establishing ethical and professional standards, administering the national CPA examination, conducting quality assurance reviews, organizing continuing professional development programs, investigating and disciplining members, approving membership applications, and providing guidance to local CPA institutes. These functions are carried out under the oversight of the Ministry of Finance. In addition, the Ministry of Finance retains authority to issue disciplinary warnings and sanctions where violations of applicable laws and standards are identified.

Further requirements apply to auditors and audit firms of listed companies under the Securities Law of the People’s Republic of China. The China Securities Regulatory Commission (CSRC) and the Ministry of Finance are jointly authorized to establish additional requirements for firms undertaking securities-related audit services, including licensing, quality assurance inspections, and investigative and disciplinary procedures. Audit firms serving listed entities must therefore hold the relevant approvals from both the Ministry of Finance and the China Securities Regulatory Commission, in addition to their provincial practice licenses.

There is no independent public audit oversight authority in the People’s Republic of China.

The audit profession is regulated under the Law of the People’s Republic of China on Certified Public Accountants, with oversight responsibilities shared among the Ministry of Finance (MoF), the Chinese Institute of Certified Public Accountants (CICPA), its local and provincial CPA institutes, and, for listed entities, the China Securities Regulatory Commission (CSRC).

Certified Public Accountants are the only individuals authorized to sign statutory audit reports in the jurisdiction. All certified public accountants are required to be members of a local CPA institute, with membership automatically conferring membership in CICPA. Local CPA institutes are responsible for membership approval, annual practice inspections, and disciplinary actions in cases of professional misconduct, while provincial finance departments are responsible for licensing accounting firms.

CICPA is responsible for establishing auditing, ethical, and professional standards; conducting quality assurance reviews; administering continuing professional development requirements; and operating the investigative and disciplinary framework for its members, under the supervision of the Ministry of Finance.

For listed companies and other securities-related audit engagements, additional oversight is exercised jointly by the Ministry of Finance and the China Securities Regulatory Commission under the Securities Law of the People’s Republic of China. Audit firms providing securities-related services must obtain approvals from both authorities in addition to their provincial practice licenses. The Ministry of Finance and the China Securities Regulatory Commission also conduct joint quality assurance inspections and investigative and disciplinary procedures for firms undertaking listed entity audits.

None of the above-mentioned bodies are members of the International Forum of Independent Audit Regulators (IFIAR).

The Chinese Institute of Certified Public Accountants (CICPA)

The Chinese Institute of Certified Public Accountants (CICPA) was established in 1988 in accordance with the Law of the People’s Republic of China on Certified Public Accountants. CICPA is the national professional accountancy organization headquartered in Beijing and oversees the local and provincial CPA institutes throughout the country. It operates under the supervision of the Ministry of Finance (MoF).

CICPA’s responsibilities in relation to the regulation of the profession include establishing ethical and professional standards for certified public accountants, administering the National Unified CPA Examination, conducting quality assurance reviews, organizing continuing professional development programs, investigating and disciplining members for non-compliance with professional standards and conduct requirements, approving membership applications, and providing guidance to local CPA institutes on registration and professional oversight matters.

In addition to its national regulatory and professional responsibilities, CICPA represents the accountancy profession in domestic and international forums. CICPA has been a member of IFAC since 1997 and is also a member of the Confederation of Asian and Pacific Accountants (CAPA).

Under the Law of the People’s Republic of China on Certified Public Accountants of 1993 (CPA Law), the quality assurance review system in the People’s Republic of China is operated on a shared basis by the Chinese Institute of Certified Public Accountants (CICPA), local CPA institutes, and public authorities, including the Ministry of Finance (MoF). Pursuant to the CPA Law and CICPA’s charter and related rules, CICPA is responsible for establishing the national framework for quality assurance reviews and overseeing its implementation, while local CPA institutes conduct inspections of audit firms within their respective jurisdictions. For firms undertaking securities-related audits, the Ministry of Finance and the China Securities Regulatory Commission (CSRC) also conduct oversight and inspection activities.

China has transitioned from the former quality control framework to the new quality management standards. In this regard, Quality Management Standard for Accounting Firms No. 5101, Business Quality Management, and Quality Management Standard for Accounting Firms No. 5102, Engagement Quality Review, have been issued and correspond to the International Standard on Quality Management 1 (ISQM 1) and International Standard on Quality Management 2 (ISQM 2), respectively. In addition, Chinese Standard on Auditing No. 1121, Quality Management for an Audit of Financial Statements, aligns with the revised International Standard on Auditing 220 (ISA 220). These standards became effective for securities-related firms from January 1, 2023 and for other firms from January 1, 2024.

Based on the available information, a quality assurance review system is established and operational for mandatory audits in the jurisdiction, and the applicable quality management standards reflect the current international framework. Responsibility for the system is shared among CICPA, local CPA institutes, and public authorities. Accordingly, the status is assessed as Adopted with Shared responsibility.

Current Status: Adopted

Under the Law of the People’s Republic of China on Certified Public Accountants of 1993 (CPA Law), the requirements for entry into the profession are established for all Certified Public Accountants. These requirements include completion of a university degree or equivalent recognized educational qualification, successful completion of the National Unified CPA Examination administered by the Chinese Institute of Certified Public Accountants (CICPA) under the oversight of the Ministry of Finance (MoF), and completion of the prescribed period of practical experience prior to admission to membership.

Pursuant to the CPA Law and CICPA’s charter, CICPA is also responsible for establishing professional education and continuing professional development requirements for its members. CICPA has issued mandatory continuing professional development requirements and operates an established continuing education system for practicing and non-practicing members, including structured annual learning requirements and monitoring mechanisms. Recent notices published by CICPA continue to demonstrate active operation of its education and talent development framework, including ongoing professional training and continuing education programs.

Based on the available information, the initial professional development and continuing professional development requirements applicable to Certified Public Accountants in the jurisdiction are established and operational, and CICPA indicates that these requirements are aligned with the International Education Standards (IES). Responsibility is shared between CICPA and the Ministry of Finance through the legal and supervisory framework established under the CPA Law. Accordingly, the status is assessed as Adopted with Shared responsibility.

Current Status: Adopted

Under the Law of the People’s Republic of China on Certified Public Accountants of 1993 (CPA Law), the Chinese Institute of Certified Public Accountants (CICPA) has the legal mandate to draft the Chinese Standards on Auditing, subject to approval by the Ministry of Finance (MoF). Responsibility for the adoption and maintenance of auditing standards is therefore shared between CICPA and the Ministry of Finance.

The Chinese Standards on Auditing have been updated to reflect the latest International Standards on Auditing (ISA) issued by the International Auditing and Assurance Standards Board (IAASB), including the current quality management framework aligned with International Standard on Quality Management 1 (ISQM 1), International Standard on Quality Management 2 (ISQM 2), and the revised ISA 220.

Based on the available information, ISA in their entirety in effect as of the time of the assessment are adopted and effective for application in all mandatory audits in the jurisdiction.

Current Status: Adopted

Under the Law of the People’s Republic of China on Certified Public Accountants of 1993 (CPA Law), the Chinese Institute of Certified Public Accountants (CICPA) is authorized to establish ethical and professional standards for certified public accountants, subject to the oversight of the Ministry of Finance (MoF). Responsibility for ethical requirements is therefore shared between CICPA and the Ministry of Finance.

The applicable Code of Ethics for Chinese CPAs has been updated to reflect the 2024 International Code of Ethics for Professional Accountants (including International Independence Standards) issued by the International Ethics Standards Board for Accountants (IESBA).

However, as the 2025 version of the International Code of Ethics for Professional Accountants (including International Independence Standards) is the version in effect as of the time of the assessment, not all the requirements of the Code currently in effect have been adopted.

Current Status: Partially Adopted

Under the Budget Law of the People’s Republic of China, as amended in 2014, government finance departments are required to prepare comprehensive financial reports on an accrual basis on an annual basis. The Ministry of Finance (MoF) is responsible for establishing public sector accounting standards in the jurisdiction.

In 2014, the accrual government accounting reform program submitted by the Ministry of Finance was approved by the State Council. Pursuant to this reform, the Government Accounting Standards, including the Basic Standard and standards covering inventories, investment property, fixed assets, and intangible assets, were issued and became effective from January 1, 2017. Additional standards, including those for public infrastructure and government reserves, together with the Government Accounting System, were subsequently issued and became effective from January 1, 2018 and January 1, 2019, respectively.

Based on the available information, public sector accounting in China is based on an accrual-basis national standards framework developed by the Ministry of Finance. However, it has not been demonstrated that International Public Sector Accounting Standards (IPSAS) have been adopted in their entirety for application by all public sector entities. Accordingly, in line with the current adoption methodology, the status is assessed as Partially Adopted with No Direct responsibility.

Current Status: Partially Adopted

Under the Law of the People’s Republic of China on Certified Public Accountants of 1993 (CPA Law), local CPA institutes have the authority to revoke CPA certificates in cases of serious professional misconduct. The law also provides that the Ministry of Finance (MoF) may issue disciplinary warnings, fines, suspensions, and other sanctions in cases of non-compliance with applicable laws and professional requirements.

Under the same law, the Chinese Institute of Certified Public Accountants (CICPA) is responsible for establishing professional rules and standards for certified public accountants and may issue related disciplinary measures through its charter and implementing regulations. Pursuant to this authority, CICPA has established a formal investigative and disciplinary framework applicable to its members. Local CPA institutes either apply CICPA’s system directly or operate systems based on the national framework established by CICPA.

In addition, the China Securities Regulatory Commission (CSRC) and the Ministry of Finance have authority to investigate and discipline auditors and audit firms undertaking audits of listed companies and other regulated entities. These authorities may impose a range of sanctions for non-compliance, including restrictions, suspensions, and monetary penalties.

Based on the available information, an investigative and disciplinary system is established and operational for certified public accountants in the jurisdiction, with responsibilities shared among CICPA, local CPA institutes, the Ministry of Finance, and the China Securities Regulatory Commission. Accordingly, the status is assessed as Adopted with Shared responsibility.

Current Status: Adopted

Under the Accounting Law of the People’s Republic of China (as amended in 2017), the Accounting Regulatory Department of the Ministry of Finance is responsible for the development and adoption of corporate accounting standards in the People’s Republic of China. The Ministry of Finance has issued two sets of accounting standards for mandatory application by corporate entities depending on their size, with advisory and technical support from the Chinese Accounting Standards Commission.

Listed, large, and medium-sized entities are required to apply the Accounting Standards for Business Enterprises (ASBEs), which are substantially converged with the International Financial Reporting Standards (IFRS). However, the IFRS Foundation confirms that the use of IFRS Accounting Standards is not permitted for domestic companies whose securities trade in a public market in mainland China, and all such entities are required to use ASBEs for financial reporting within the jurisdiction.

Small entities may apply the accounting standards for small entities, which were developed with reference to the IFRS for Small and Medium-sized Entities (SMEs). While IFRS and the IFRS for SMEs have been translated into simplified Chinese with the permission of the IFRS Foundation, these standards are not legally permissible for direct statutory application in mainland China.

Accordingly, as IFRS Accounting Standards in effect as of the time of the assessment are not adopted and effective for application by all domestic publicly accountable entities in consolidated general purpose financial statements, the status is assessed as Not Adopted with No Direct responsibility.

Current Status: Not Adopted

Relevant Organizations

• Accounting Regulatory Department (ARD)
• Chinese Accounting Standards Commission (CASC)
• Chinese Institute of Certified Public Accountants (CICPA)
• Chinese Securities and Regulatory Commission (CSRC)
• Ministry of Finance (MoF)

Relevant Legislation

• Accounting Law of the People’s Republic of China of 2017
• Company Law of 1993 (as amended in 2013)
• Law of the People’s Republic of China on Certified Public Accountants 2014 (CPA Law)

Relevant Publications

• China Briefing, China’s Accounting Standards
• CICPA, Overview of the Accountancy Profession in China, January 2015.
• Crowe Horwath, “Country by Country Financial Reporting and Auditing Framework: China,” March 2014.
• Ernst and Young, China Accounting Alert, February 2014.
• IFRS Foundation, “IFRS Application Around the World?Jurisdictional Profile: China,” January 12, 2018.
• Ministry of Finance, “The Experience of China’s Accounting Standards Setting and Its Convergence with IFRS,” February 2010.