At a China
Press Conference in Beijing on February 15, 2006, Graham Ward, President,
International Federation of Accountants remarked that: “The decision by
China to converge towards international auditing standards sends a clear
message to the world that both the Chinese people and the Chinese accountancy
profession are committed to transparency, quality and high professional
standards. Support of these standards will benefit not only the accountancy
profession, but also, and even more importantly, all Chinese citizens and the
Chinese economy as a whole. Why? Because following high, internationally accepted
standards builds trust in the audit process; it builds credibility in the
information provided by auditors; it builds investor confidence – all of which
are vital to the development of your capital markets. As your economy continues
to expand, you are far better positioned to improve the quality of life of your
citizens.”
He concluded that: “I am proud that IFAC
and the CICPA are working together. Through adherence to high professional
standards we can, together, bring about social stability and good governance in
business. Through convergence to international standards we can, together,
deliver our promise of quality. And through acting in the public interest, we
can, together, build public trust and sound economies that support a better
quality of life for all. I firmly believe that China’s move toward convergence
will go a long way towards improving the life and livelihoods of the people of
the People’s Republic of China.”
In line with the convergence towards international
auditing standards, Guidance
on Professional Judgment for CPAs (released
by the Chinese Institute of Certified Public Accountants on March 26, 2015) states
that: “the term professional judgment
refers to the application of relevant training, knowledge and experience,
within the context provided by auditing, accounting and ethical standards, in
making informed decisions about the courses of action that are appropriate in
the circumstances of the audit engagement.” Accordingly, the guidance makes
recommendations related to improvement of the quality of CPA’s professional
judgment, recommendations for accounting firms, recommendations for CPAs,
recommendations for regulators and recommendations for standard setters.
Learn more about the Chinese Institute of Certified
Public Accountants – CICPA and the current situation in China by reading
the Overview
of the Accountancy Profession in China (released by the CICPA on January 21, 2016).
The Overview explains that: “The accountancy profession was introduced to China
in the early 20th century, mainly serving the booming national industry and
commerce. After the founding of the PRC, the profession had played a vital role
in the national economic recovery. It was suspended in the Mid-20th century
when China adopted a planned economic system; along with China’s historical
economic reform and opening up policies, the accountancy profession was revitalized
and reconstructed and grew steadily. With over 30 years of development and
growth, the accountancy profession in China is now a widely recognized and
respectable profession. Accountants are an important link of integrity chain of
the market economy and they are entrusted to safeguard the public interest.”
