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Li Yong, assistant minister of finance of China, on Wednesday urged to enhance professional ethics of the accounting service and resume the public trust in the sector.
Addressing on the second day of the 16th World Congress of Accountants here, Li said the accounting community is facing a crisis of professional integrity and a comprehensive approach should be taken to deal with the issue.
Li, who is also president of the Confederation of Asian & Pacific Accountants (CAPA), noted that it requires continuous efforts to enhance professional ethics.
As time goes on and the economy develops, the accounting practice will face an even more complicated economic situation and more challenges, while the general public will also raise more requirements for accountants, he added.
Li said there are three most pressing tasks that must be taken up to enhance the professional ethics and they include serving the public interest earnestly, striving for professionalism and keeping independence in practicing.
He pointed out that among the professional ethics for accountants, to keep independence is the key and the precondition for achieving objectivity and fairness.
Accounting organizations in different countries and regions should work for the common ground and at the same time establish and improve corresponding standards based on their own situations in the process of solving the issue of accountants' independence, he said.
The Chinese Institute of Certified Public Accountants (CPAs) issued Guidelines on Professional Ethics for Chinese CPAs, he said, adding that according to these guidelines, accounting firms in China are not permitted to make both the financial statement preparation and auditing for a listed company at the same time.
Li noted that to enhance the professional ethics is a task for all with no delay. CAPA will pay attention to and study on the factors related to the professional ethics, so as to take effective measures to maintain the independence of the practice, enhance the professional ethics and resume the general public's confidence in the accounting service.
Currently, foreigners who have obtained CPA (certified public account) licenses from Chinese competent authority can set up accounting practices and establish member firms in China. National treatments are granted in all aspects except for certain restrictions on the entry and residence of foreign individuals.
Official says, China will take into consideration China's objective conditions and continue to draw references to the international accounting standards (IAS) in the process of formulating accounting standards.
As a result of the accounting reform over the recent years, China has made significant progress in harmonizing with international accounting standards. According to the Chinese official, there have been 11 international or foreign accounting firms setting up 17 offices in seven cities. Eleven international accounting firms have developed 26 member offices across 14 Chinese cities. Twenty-three eligible overseas members of the Chinese Institute of Certified Public Accountants have been approved to practice in China.
(china.org.cn November 21, 2002)
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