Big Five win Beijing mandate in audit of listed financial firms

Mainland authorities have authorised the Big Five international accounting firms to audit the accounts of listed financial companies in China, including banks, securities firms, brokerages and asset management firms.

Welcoming the decision, accounting industry officials said it would help to bring accounting in China in line with international standards and improve the transparency and accountability of the mainland's financial sector.

Eric Li Ka-cheung, a legislator representing the local accounting sector, said many Chinese companies were expected to use Big Five accounting firms in Hong Kong. The five - Arthur Andersen, Deloitte Touche Tohmatsu, Ernst & Young, KPMG and PricewaterhouseCoopers - were approved by both the China Securities Regulatory Commission and the Ministry of Finance, the China Securities newspaper reported.

Under a new regulation issued in January, all financial companies listing on either the Shanghai or Shenzhen stock exchanges have to be audited by both domestic and overseas accountants.

Mr Li believed the new regulation showed that China wanted to boost international confidence in its finance sector. It wanted to use the Big Five to prove that Chinese companies could meet international standards.

This would help them raise funds on international markets by issuing debt or securities and make it easier for them to borrow from overseas banks.