The localisation drive by the central government for joint-venture accounting practices has not had any impact on the business of international accounting firms with a substantial presence in the country. Under the Sino-foreign Joint Venture Accounting Firms Localisation Transformation Programme, announced by the Ministry of Finance in May, the mainland operations of KPMG and Ernst & Young have become special general partnerships. Stephen Yiu, chairman of KPMG China and senior partner of KPMG Huazhen special general partnership, says KPMG Huazhen's conversion from a joint venture to a special general partnership took place on August 1. The conversion did not have any effect on its clients or staff, nor did it affect the company's business, quality of its practice or its ability to serve clients. "The conversion mainly involves a change in legal form of the firm. Our overall operations, licences, all partners, professional staff or general staff, all contacts with clients and our responsibilities have all been transferred to the new special general partnership. We are confident we will maintain the quality of our practice," Yiu says. Given the tight time frame, KPMG Huazhen's conversion is no mean feat. In less than three months, the company had to deal with the legal, administrative and logistical aspects to ensure a smooth transition to the new structure. "KPMG Huazhen committed the necessary resources, including setting up a special task force to oversee all conversion activities, and worked closely with local authorities to ensure minimal disruption for our people, clients and the market," Yiu says. "The firm will continue to operate in accordance with Chinese laws, regulations and professional guidelines, as well as with KPMG International's professional standards, thereby maintaining the quality of our practice." Michael Wong, people leader for Greater China at Ernst & Young, says many professionals from Hong Kong working for its mainland operation are interested in getting a mainland qualification for their long-term career development. The company supports these staff with an exam assistance programme as it does for other people in its mainland firm, he says. For certified public accountants recruited in Hong Kong to work on the mainland, Ernst & Young has implemented a people development framework called EYU, which means "EY and You". "The framework has three components: learning, experience and coaching. Learning is about classroom and web-based training courses on technical and management skills. We have a learning map for people at each level to know what they need to learn," Wong says. "Experience is about on-the-job training. We also have an experience map for our people at each level to know what experience they should gain for their progression to the next level. Coaching encompasses real-time feedback during daily work and a formal performance evaluation process." Ernst & Young is keen to retain all high-performing professionals, including those who have already obtained mainland-issued licences, such as certified public accountants, certified public valuers and certified tax agents. "We have implemented people initiatives to improve engagement of staff. We enhance communication, promote a diversified and inclusive firm culture, and recognise our people's contribution via competitive compensation and benefit schemes and other ways. Based on our recent Global People Survey, we see a continuous increase in our People Engagement Index," Wong says. Caption: Stephen Yiu; Michael Wong; The mainland operations of KPMG and Ernst & Young have become special general partnerships under the Sino-foreign Joint Venture Accounting Firms Localisation Transformation Programme announced by the Ministry of Finance in May. Photo: ImagineChina