bodyType

customContents

entityId

entityUuid

articlePageQuery

filter

article

articleBaseAdvertisingInfoArticle

articleListArticle

articleSeoArticle

hooksArticleAcknowledgementGateOverlayArticle

hooksTrackPageViewArticle

hooksContentInterestArticle

articleLinkingDataContent

hooksAmpRedirectArticle

articleSchemaContent

liveArticle

advertZone

sentiment

contentLock

topics

types

sections

paywallTypes

createdDate

publishedDate

urlAlias

moreOnThisArticles

sponsorType

commentCount

authorLocations

authors

corrections

displaySlideShow

multimediaEmbed

printHeadline

seriesContainer

articleSpeeches

socialHeadline

headline

images

flag

firstTopic

glossary

flattenTypeIds

image

relatedLinks

relatedNewsletters

__typename

sponsor

pdfFiles

seriesReverseOrder

series

disableOffPlatformContent

published

updatedDate

summary

subHeadline

body

keywords

readingTime

customTimezone

liveContents

Eric Ng

China admits it is desperately short of certified public accountants (CPA) to service growing demand.

The country needs four times the present number of CPAs, together with a restructuring and consolidation of the profession, in the coming years, said Ministry of Finance assistant minister Li Yong.

There were about 70,000 CPAs operating in about 4,600 professional accounting firms on the mainland, he said.

There are about the same number of non-practising CPAs, serving as in-house corporate accountants, according to soon to be managing partner at accounting firm Ernst & Young Da Hua, Tang Yunwei.

Mr Li said the numbers were huge progress considering China started to administer qualification exams for would-be public accountants only in 1991.

He estimated China needed 300,000 - slightly fewer than the number of CPAs in the United  States - to keep pace with economic growth and the increasing reliance on the financial market.

Observers expect a listing rush in response to Beijing's initiatives to improve both state and private companies' access to the market. Beijing's latest moves to rein-in financial market irregularities in reaction to the high-profile China Venture Capital share-price manipulation and other cases could also fuel demand for quality accounting and auditing professionals.

But the problem is how to meet the demand in the short term, despite recent years that have seen accounting ranking among the most popular courses in Chinese colleges.

One way is to fill the gap by allowing foreign-certified accountants to practise.

International convention says only accountants at the level of partners are authorised to sign legally binding documents.

But China bans foreign-certified accountants from assuming such positions until they have passed the Chinese certification test.

The number of foreign accountants who have passed that test has been small, with the most obvious problem being the language barriers.

Under bilateral World Trade Organisation accession agreements negotiated by the mainland, it must scrap local certification demands for otherwise qualified people, Ernst & Young Hong Kong & China chairman Anthony Wu said.

Mutual recognition of professional qualifications offers a temporary solution.

But Mr Li said other countries' reluctance to recognise Chinese professional accreditation got in the way of progress in negotiations.

'Mutual recognition of CPA qualification is a sensitive issue,' he said. 'It is still a long way off.'

Mr Li also spoke of the urgency to restructure and consolidate domestic accounting firms, most of which are small. Only about 100 are medium-sized.

He expected to see a crop of large firms, with staff sizes of 600 to 1,000, emerging within five years.

To get there, Mr Li encouraged local firms to consider co-operation with international accounting houses, citing Ernst & Young and Shanghai-based Da Hua's merger.



Scandal highlights lack of number crunchers