Development of international accounting firms in china
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Development of International Accounting Firms in China. XIE Rong Professor & Vice President, Shanghai National Accounting Institute May 24, 2006. Development of International Accounting Firms in China.

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Development of International Accounting Firms in China

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Development of international accounting firms in china

Development of International Accounting Firms in China

XIE Rong

Professor & Vice President,

Shanghai National Accounting Institute

May 24, 2006


Development of international accounting firms in china1

Development of International Accounting Firms in China

  • The Economic Reform and the Opportunity for the Development of International Accounting Firms in China

  • The Internationalization and Localization of International Accounting Firms in China

  • The Roles, Values and Experiences of International Accounting Firms in China

  • The Expectations for the Development of CPA Profession in China

Shanghai National Accounting Institute


Development of international accounting firms in china

The Economic Reform and the Opportunity for the Development of International Accounting Firms in China

Three important events to promote the development of CPA profession in China

  • 1980s Economic Reform and Open Policy

  • 1990s Development of Stock Exchanges

  • 21 Century Entering into WTO

Shanghai National Accounting Institute


Development of international accounting firms in china

The Economic Reform and the Opportunity for the Development of International Accounting Firms in China

The Economic Development in the past 15 years

Shanghai National Accounting Institute


Development of international accounting firms in china

The Economic Reform and the Opportunity for the Development of International Accounting Firms in China

The Development of CPA Profession

Shanghai National Accounting Institute


Development of international accounting firms in china

The Economic Reform and the Opportunity for the Development of International Accounting Firms in China

  • 1980s, Big six representative offices established in China

  • 1992-1993, Big Six established joint accounting firm respectively with its Chinese partner (fifty-fifty model)

    • Operating responsibility

    • Financial responsibily

Shanghai National Accounting Institute


Development of international accounting firms in china

The Economic Reform and the Opportunity for the Development of International Accounting Firms in China

After entering into WTO, international accounting firms have got a rapid development in China, to the end of June 2005, international accounting firms had established:

  • 27 member firms

  • 7 associated firms

  • 20 representative offices

  • A several hundreds passed CICPA exam.

  • 32 have got CICPA certificates.

Shanghai National Accounting Institute


Development of international accounting firms in china

Big 4 international firms vs. Big 4 Local firms (2004)

The Economic Reform and the Opportunity for the Development of International Accounting Firms in China

Shanghai National Accounting Institute


The internationalization and localization of international accounting firms in china

The Internationalization and Localization of International Accounting Firms in China

  • Internationalization

    • Office management

    • Quality management

    • Training

    • Technical support

Shanghai National Accounting Institute


The internationalization and localization of international accounting firms in china1

The Internationalization and Localization of International Accounting Firms in China

  • Localization

    • Staffing

    • Clients

    • Standards

Shanghai National Accounting Institute


The roles values and experiences of international accounting firms in china

The Roles, Values and Experiences of International Accounting Firms in China

  • Roles

    • Attract Foreign Investment: serve multinational companies

    • Help Chinese big companies go to international capital markets

    • Promote the development of accounting profession in China

Shanghai National Accounting Institute


The roles values and experiences of international accounting firms in china1

The Roles, Values and Experiences of International Accounting Firms in China

  • Values

    • International capital raising

    • Train competent accounting professionals

    • Multi-services

    • Improve the understanding and value of accounting profession in China

Shanghai National Accounting Institute


The roles values and experiences of international accounting firms in china2

The Roles, Values and Experiences of International Accounting Firms in China

  • Experiences and Challenges

    • Flow of trained staff

    • High service fees

    • Rapid expansion vs. quality control

    • Market share with local accounting firms

    • Monopoly and Competition in accounting profession

Shanghai National Accounting Institute


The expectations for the development of cpa profession in china

The Expectations for the Development of CPA Profession in China

  • Market Demands for CPA services

    • Foreign invested companies

    • Listed companies

    • State owned enterprise

  • Totally around 300,000 CPAs needed

Shanghai National Accounting Institute


The expectations for the development of cpa profession in china1

The Expectations for the Development of CPA Profession in China

  • CPA examination increased rapidly

    • 1991: 10,375

    • 1995:135,000

    • 2000:260,000

    • 2004:315,000

  • Continuing professional education

    • Three National Accounting Institute established (Beijing, Shanghai and Xiamen), provide short-term training courses and MPAcc degree education

    • Accelerate of the improvement of auditing standards

Shanghai National Accounting Institute


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