The General Office of the State Council Regarding Further Regulating the Order of Financial Audits

Opinions on Promoting the Healthy Development of the CPA Industry

No. 30 (2021) of the State Council

  The people's governments of all provinces, autonomous regions, and municipalities directly under the Central Government, all ministries and commissions of the State Council, and all directly affiliated institutions:

  Since the reform and opening up, the scale of the CPA industry in my country has been continuously expanded, the scope of services has been continuously expanded, and the overall development of the industry has been improving. It has played an important role in maintaining the order of the capital market and social public interests, and improving the quality of accounting information and economic efficiency. There are problems such as inadequate performance of the "gatekeeper" duties of accounting firms, insufficient industry supervision and law enforcement, and the distortion of corporate financial accounting information and financial fraud in listed companies.

In order to thoroughly implement the decision and deployment of the Party Central Committee and the State Council on strict financial discipline, effectively strengthen the supervision of accounting firms, curb financial fraud, and effectively play the role of certified public accountants in auditing and verifying, with the consent of the State Council, we now further regulate the financial audit order and promote the certified public accountant industry Healthy development puts forward the following opinions.

1. General requirements

  (1) Guiding ideology.

Guided by Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, fully implement the spirit of the 19th National Congress of the Communist Party of China and the 2nd, 3rd, 4th and 5th Plenary Sessions of the 19th National Congress of the Communist Party of China, and earnestly strengthen the "four consciousnesses" and strengthen the "four self-confidence." , Achieve the "two maintenances", in accordance with the decisions and deployment of the Party Central Committee and the State Council, and strict financial discipline, with the goal of comprehensively improving the ability of the CPA industry to serve the country, coordinating development and safety, grasping the main line of quality improvement, and keeping the bottom line of integrity. Strengthen the red line of laws and regulations.

Adhere to the equal emphasis on supervision and service, the combination of symptom treatment and root treatment, establish a system concept, do a good job in overall planning, strive to build a regulatory work pattern of departmental coordination, multi-party interaction, and social participation, effectively solve outstanding problems, effectively strengthen administrative supervision, and gradually improve industry governance. Significantly optimize the practice environment, continue to improve the quality of auditing, and provide strong support for maintaining social fairness and justice, standardizing the order of the market economy, and ensuring national economic security.

  (2) Working principles.

  ——Honesty, quality first.

Regarding integrity building as the lifeline of industry development, we always adhere to the development orientation of quality first, and continue to improve the practice ability, independence, ethics and industry credibility of certified public accountants.

  —— Strict supervision and strict law enforcement.

Adhere to problem orientation, resolutely correct major issues that violate professional and ethical standards, severely crack down on violations of accounting auditing laws and regulations, find one, investigate and deal with them together, achieve "zero tolerance", expose typical cases, and maintain industry integrity.

  ——Responsible, coordinated efforts.

Strengthen communication and collaboration between regulatory agencies, government agencies and industry associations, further clarify the boundaries of responsibilities, implement regulatory responsibilities, strengthen overall coordination, improve working mechanisms, strengthen information sharing, and form a regulatory force.

  —— Take comprehensive measures and take multiple measures simultaneously.

Strengthen the systematic and synergistic supervision of the CPA industry, comprehensively use administrative supervision, market constraints, industry self-discipline, social supervision and other methods to optimize the practice environment, purify the industry atmosphere, and urge accounting firms to improve their internal management level and improve the industry Regulatory effectiveness.

  ——Focus on the long-term perspective, and always focus on it unremittingly.

Based on the current situation, strengthen the requirements of laws, regulations and professional ethics, pay close attention to professional auditing standards, and focus on solving outstanding problems; take a long-term view, advance with the times, improve relevant basic system specifications, form a long-term mechanism, and comprehensively improve industry regulatory capabilities and governance levels.

Second, rectify the financial audit order in accordance with the law

  (3) Strengthening the supervision of accounting firms engaged in securities business in accordance with the law.

The competent authorities of the industry strictly perform their duties, strengthen the supervision and inspection power of finance and accounting, promote the formation of a professional law enforcement and inspection mechanism, and carry out effective daily supervision of accounting firms engaged in securities business.

Introduce the supervision and inspection measures for accounting firms, highlight the key points of inspection, increase the frequency of inspections, strictly deal with penalties, establish a self-inspection and self-correction reporting mechanism, and strengthen the responsibilities of accounting firms.

Improve the coordination mechanism for the supervision of accounting firms engaged in securities business by relevant departments, strengthen overall coordination, form a supervisory force, strictly supervise accounting firms and listed companies, and pursue audit and accounting responsibilities for financial fraud in accordance with the law.

Strengthen financial and accounting supervision and big data analysis, and carry out precise crackdowns on financial fraud.

  (4) Seriously investigate and deal with violations of laws and regulations and expose typical cases.

Interaction between upper and lower levels to rectify various violations of laws and regulations in accordance with the law, especially for the unlicensed operation of accounting firms in the current industry, certified public accountant practice, online sales of audit reports, practice beyond competence, leakage and dissemination of sensitive information related to confidentiality, etc., Resolutely correct major issues that violate professional norms and ethics, such as collusion by accounting firms and loss of independence.

Sort out a batch of typical cases of violations of laws and regulations in the financial and accounting field, and form a list of joint actions by various departments, distinguish different situations and deal with them strictly in accordance with laws and regulations, resolutely achieve "zero tolerance", severely penalize major cases that have a bad impact, and impose severe penalties on those who violate laws and regulations. Form an effective deterrent.

Increase the exposure of typical cases, and form a warning to the whole society and the whole industry.

  (5) Accelerate the construction of laws and basic systems for the CPA industry.

Formulate a list of basic systems for the CPA industry, follow up and improve relevant system regulations in a timely manner, and establish a sound institutionalized and normalized long-term mechanism.

Promote the acceleration of the revision of the Certified Public Accountant Law, further improve administrative compulsory measures, enrich supervision tools, refine penalties, and increase penalties.

A reasonable distinction should be made between the corporate accounting responsibilities of financial fraud and the audit responsibilities of accounting firms, and the legal responsibilities of other entities for issuing false certifications to certified public accountants should be clarified.

Improve the relevant regulations on the organizational form of accounting firms, and clarify the audit requirements of public interest entities.

In accordance with the principle of equivalent penalties, cases involving the liability of accounting firms shall be handled in accordance with the law, and the judicial interpretations on the legal liabilities of accounting firms and certified public accountants shall be studied and perfected, and the manner in which special general partnership accounting firms shall bear civil liabilities shall be further clarified.

Improve and maintain information security requirements, and clarify relevant regulatory requirements for overseas institutions and personnel entering into practice.

Scientifically and reasonably determine the specific requirements of accounting firms for auditing services of specific entities such as listed companies, and uniformly disclose relevant standards.

Optimize the audit rotation mechanism of accounting firms and certified public accountants based on actual conditions.

  (6) Establish and improve a supervisory cooperation mechanism.

Establish a cross-departmental cooperation mechanism to realize the organic integration and synergy of financial and accounting supervision and other supervision.

Establish the CPA industry annual work conference and daily joint conference mechanism, integrate forces, build consensus, and effectively form a regulatory force, timely study and solve outstanding problems that restrict the development of the industry, and continuously improve the level of industry supervision.

In response to the prominent cross-regional and cross-industry issues in the financial accounting field, strengthen supervision and coordination between the central and local governments and between departments.

Carry out cross-border accounting audit supervision cooperation in accordance with laws and regulations, safeguard the national economic information security and the legitimate rights and interests of enterprises, and enhance international credibility and influence.

3. Strengthen the daily management of the industry

  (7) Strengthen the implementation of the unified national accounting system.

Improve the corporate accounting standards system, revise relevant guides, cases, etc., strengthen training and practical guidance, and solve outstanding problems in implementation in a timely manner.

Formulate and promote accounting data standards, carry out pilot projects for electronic submission of corporate accounting statements, and promote the sharing of accounting data between departments.

Promote the acceleration of the revision of the accounting law, further clarify requirements for accounting, internal control, and informatization construction, enrich supervisory methods, substantially increase penalties, increase legal responsibility for financial fraud, promote the establishment of an accounting integrity system, and comprehensively improve the quality of corporate accounting information .

  (8) Strengthen the daily supervision and credit management of the industry.

Strengthen the construction of informatization, build a unified regulatory information platform for the certified public accountant industry, and strengthen daily monitoring through business reporting, electronic certificates and signatures, and improve the efficiency and level of supervision.

Explore the establishment of a single source system for audit report data, promote the realization of a nationwide "one code connection", and tackle the problem of false audit reports from the source.

Introduce the management measures for the list of seriously untrustworthy entities in the CPA industry, share and disclose relevant information in accordance with laws and regulations, and implement joint punishments.

Unblock complaint and report channels, establish a unified industry report acceptance platform, improve the complaint and report handling mechanism, and achieve "responsible for receiving complaints, time-limited verification, verification must be handled, and strict handling".

  (9) Improve the audit standard system and professional ethics system.

Based on the practice of certified public accountants in my country, combined with the requirements of international standards, we will promptly revise and improve the auditing standard system and promote its implementation.

Strengthen the publicity, training and implementation guidance of professional ethics codes, and guide accounting firms to improve audit procedures, enhance audit independence, and improve their ability to deal with financial fraud in response to weak links in the implementation of professional codes and ethics.

4. Optimize the practice environment and ability

  (10) Guide accounting firms to strengthen internal management.

Strengthen the integrated management of accounting firms, introduce integrated management measures, establish a measurable and comparable index system, and guide accounting firms to implement unified management in personnel deployment, financial arrangements, business undertaking, technical standards and information construction, and establish Improve open, transparent and standardized integrated management inspection and evaluation procedures.

Further improve the comprehensive ranking mechanism of accounting firms, use the results of integrated management inspection and evaluation as an important basis for ranking, and guide the accounting firms to strengthen internal management by benchmarking against tables.

Combining the characteristics of large, medium, and small accounting firms, each year, it establishes typical demonstrations in terms of integrated management, information management, and "specialized, specialized" development, and promotes advanced experience.

Efforts will be made to cultivate a group of leading domestic and internationally influential accounting firms to help more independent brand accounting firms go global.

  (11) Promote the establishment of a quality-oriented accounting firm selection mechanism.

Strengthen the guidance and supervision of the internal audit work of enterprises, mobilize the internal audit and social audit forces, and enhance the joint force of audit supervision.

Improve the relevant regulations on the selection of accounting firms by state-owned enterprises and listed companies, consolidate the responsibilities of corporate audit committees, scientifically set the index weights for the selection of accounting firms, increase the weight of quality factors, reduce the weight of price factors, improve the evaluation methods of quotation factors, and guide the formation of The quality-oriented selection mechanism effectively curbs vicious competition from the source.

Strengthen the supervision of the implementation of relevant regulations on selection and employment, and severely hold accountable companies and public accounting firms that violate the regulations and reduce prices and competition.

  (12) Enhance the audit risk bearing capacity of accounting firms.

Improve the professional liability insurance system, amend the Interim Measures for Professional Liability Insurance of Accounting Firms, and fully consider the objective differences in the client groups and risk status of accounting firms based on the development of the capital market and the current status of the securities business, and improve relevant requirements such as the amount of insurance.

Strengthen the supervision of professional liability insurance and the provision of professional risk funds, regulate the management and use of professional risk funds, and urge accounting firms to improve their risk prevention capabilities.

Explore the implementation of centralized insurance in the industry.

  (13) Strengthen professional training and education of certified public accountants.

Innovate the methods of continuing education, and enrich and improve the content of education around the key points of professional competence, professional skills, professional value, and professional ethics.

Make full use of information technology means, launch relevant applications of continuing education, effectively improve training effects, continue to maintain and strengthen the professional competence and professional ethics of certified public accountants, and improve the quality of audits.

  (14) Further standardize the bank's letter and certificate business.

Strengthen the construction of the bank's letter and evidence digital platform, accelerate the intensification, standardization and digitization of letter and evidence, use information technology to solve the problems of false letter and evidence, low efficiency, and excessive fees, and support the improvement of audit efficiency and quality.

Carry out the pilot work of the third-party bank letter verification platform, summarize the pilot experience, form supporting work guidelines, improve the business, data, security and other standard systems, and promote the standardized, orderly and safe operation of the bank letter verification digital platform, and it is in the audit of the listed company's annual report Promote applications.

Regulate the bank's letter-verification business and charging behavior, and severely investigate and deal with violations of laws and regulations such as providing false replies.

5. Strengthen organization and implementation

  (15) Strengthen the overall leadership of the party.

Further implement the responsibility of the industry’s party building work, adhere to the unification of the tangible and effective coverage of the party organization and work of the accounting firm, promote the accounting firm to include the party building work requirements in the charter or agreement, strengthen education, management, supervision, and service, and give full play to the industry The role of grassroots party organizations as a battle fortress and a vanguard and exemplary role of party members provide a strong political guarantee for the healthy development of the certified public accountant industry.

  (16) Strengthen organization and leadership.

All regions and relevant departments should proceed from the overall situation of economic and social development and comprehensive deepening of reform and opening up, fully understand the importance of promoting the healthy development of the certified public accountant industry, and put relevant work on the important agenda as an important part of inspection and supervision.

As the competent department, the financial department should take the lead in establishing information reporting, supervision and evaluation systems, and play an overall role in overall planning.

Strengthen industry self-discipline, support the Association of Certified Public Accountants to perform their duties in accordance with the law, and give full play to the role of the Association.

Pay close attention to major issues in the development of the CPA industry, strengthen forward-looking and predictive research, adhere to problem orientation, focus on system construction, formulate and improve basic systems, timely issue supporting policies, implement precise policies, and steadily promote various key tasks.

  (17) Strengthen publicity and guidance.

Establish the daily monitoring of industry public opinion, consultation and judgment, and the classification and response mechanism of the central and local governments, government departments and industry associations.

Strengthen the publicity of the laws, regulations and supervision system of the certified public accountant industry, and actively guide public opinion and market expectations.

Office of the State Council

July 30, 2021

  (This piece is publicly released)