Quality pledge despite change

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."