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February 6, 2012

China tightens audit regulations

The Chinese finance ministry and security watchdogs have introduced new regulations for firms auditing listed companies, according to media reports.

The new rules require auditing firms to have at least CYN80m ($13m) annual revenue, up from 16m, and a minimum of 200 certified accountants to serve publicly traded companies.

The media has reported that the Chinese Ministry of Finance (MoF) said the rules are aimed at protecting investor interests and improving audit quality for listed firms following the accounting fraud scandals in 2010 and 2011, in which many Chinese firms traded in Canada and US had their shares suspended.

At the moment China has 53 accounting firms qualified to audit listed firms, according to the China Securities Regulatory Commission website.

Auditors must meet the new regulations by the end of 2013.

 

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