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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 China.

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Development of International Accounting Firms in China

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

  2. 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

  3. 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

  4. 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

  5. The Economic Reform and the Opportunity for the Development of International Accounting Firms in China The Development of CPA Profession Shanghai National Accounting Institute

  6. 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

  7. 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

  8. 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

  9. The Internationalization and Localization of International Accounting Firms in China • Internationalization • Office management • Quality management • Training • Technical support Shanghai National Accounting Institute

  10. The Internationalization and Localization of International Accounting Firms in China • Localization • Staffing • Clients • Standards Shanghai National Accounting Institute

  11. 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

  12. 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

  13. 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

  14. 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

  15. 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

  16. Thanks!

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