With the development of China’s market economy and the deepening of reform and opening-up, the Chinese Certified Public Accountant (CPA) profession has continuously grown and strengthened in the historical process of serving reform and opening-up and national development, establishing a set of ten major systems that foster a virtuous cycle of industry development and market demand.

I. An Attestation Service System Oriented Toward Supporting Economic and Social Development

The Certified Public Accountant (CPA) profession is an important force in China’s market economy development and the maintenance of market order, providing critical audit oversight and professional services. Currently, a comprehensive assurance service system has been largely established, centered on audit and attestation services, expanded through consulting services, and supported by innovative exploration at demonstration bases for accounting services. This system provides holistic support for economic and social development and has played a significant role in facilitating the transformation of economic development models, innovating social governance, and promoting the shift in government functions.

The service clientele of the Certified Public Accountant (CPA) profession has evolved from initially serving primarily “three-capital” enterprises—providing services such as tax filing, capital verification, financial statement review, and foreign exchange transaction reporting—to now offering financial statement audit services to all types of enterprises. Today, CPAs serve state-owned enterprises, listed companies, joint-stock companies, as well as non-profit organizations including government departments, hospitals, universities, and social groups. The number of enterprises, administrative institutions, and public institutions served by CPAs exceeds 3.5 million.

The scope of services offered by Certified Public Accountants has expanded beyond traditional audit and attestation services to encompass advisory services such as enterprise internal control system design, accounting service outsourcing, management consulting, and tax agency. At the same time, CPAs continuously monitor and respond to evolving reform and service demands in areas including ecological and environmental protection, energy conservation, capital market and financial sector reforms, and government procurement of accounting services. As a result, they have developed new audit and attestation services, such as carbon emission audits and certification for high-tech enterprises, and provide specialized services including foreign exchange annual inspections, customs audits, and supervision and management of state-owned assets.

II. A Competency-Based Examination and Assessment System

The National Uniform Examination for Certified Public Accountants is a central component of the industry’s talent evaluation and selection process, playing a fundamental role in guiding the professional development of talented individuals, assessing the qualifications of accounting professionals, and selecting and strengthening the industry’s talent pool.

The Certified Public Accountant (CPA) examination is guided by the "Certified Public Accountant Law" and the "Regulations on the National Unified Examination for CPAs," and its evaluation is based on the "Guidelines for Competencies of Chinese CPAs" and the "International Education Standards for Professional Accountants." A quality assurance mechanism has been established, covering all aspects of the examination—including examination organization, test security, penalties for violations, and marking procedures. This mechanism has fostered an examination organizational structure led by the Examination Office of the Ministry of Finance and provincial-level examination offices, with seamless coordination and fully functional support across all levels of fiscal departments and CPA associations. As a result, a relatively comprehensive system of examination fundamentals, quality assurance mechanisms, and organizational management has been put in place, creating an examination evaluation system that aligns with the concept of lifelong learning and fully reflects the requirements of competency-based assessment.

Currently, the National Uniform Examination for Certified Public Accountants has been fully computerized. The examination is divided into two stages: the Professional Stage and the Comprehensive Stage. The Professional Stage comprises six subjects: Accounting, Auditing, Financial and Cost Management, Economic Law, Tax Law, and Corporate Strategy and Risk Management. The Comprehensive Stage involves a comprehensive assessment of professional competencies. In terms of exam subject exemptions, agreements have been signed with the Hong Kong Institute of Certified Public Accountants and the Association of Chartered Certified Accountants in England and Wales to mutually exempt certain exam subjects. To date, the CPA examination has been successfully held 22 times, with a total of 4.15 million people registering to take the exam. Among them, 1.88 million person-times have passed individual subjects, and 178,000 candidates have obtained certificates for passing all subjects. In addition to mainland China, examination centers for the CPA examination have been established in Hong Kong, Macao, and Brussels, Belgium. A total of 555 residents from Hong Kong, Macao, Taiwan, and foreign nationals have successfully passed the CPA examination.

III. A Registration and Entry System Guided by Strict Control of “Thresholds”

Registering, managing, and conducting qualification reviews of certified public accountants is an important function entrusted to the CPA Association by the Certified Public Accountant Law. It is also a necessary measure for maintaining the fundamental competence and professional standards of CPAs, and serves as the foundation and prerequisite for the development of the profession.

In order to effectively implement the Certified Public Accountant Law, the Ministry of Finance and the Chinese Institute of Certified Public Accountants have successively formulated and issued a series of industry management systems covering CPA registration, qualification verification, firm approval, and temporary practice by overseas firms. These systems have established a comprehensive registration and admission framework centered on the Certified Public Accountant Law, encompassing CPA registration, management, and inspection, and designed to thoroughly assess CPAs’ competence, thereby effectively safeguarding the professional capabilities and integrity of the accounting profession.

On this basis, an industry integrity information monitoring system centered on “registration” has been established. This system comprehensively records members’ professional experience, qualification credentials, practice quality, disciplinary actions, and rewards, and promptly discloses such information to the public, thereby enhancing the transparency and informatization of industry governance and subjecting it to public oversight. From 2005 to 2013, more than 13,400 certified public accountants had their CPA qualifications revoked or canceled for failing to pass the annual inspection.

IV. A Practice Standards System Guided by International Convergence

A high-quality system of practice standards serves as the technical foundation for the honest and professional practice of certified public accountants; it is the “leading force” driving the industry’s standardization and professional development; it represents the authoritative benchmark for assessing the quality of CPAs’ practice; and it also provides significant impetus for audit theory research, curriculum development, and textbook creation.

The framework of the Certified Public Accountant (CPA) practice standards system comprises practice standards centered on auditing standards, professional ethical norms embodied in the Code of Professional Ethics, and quality control standards aimed at enhancing risk management within accounting firms. Specifically, the CPA practice standards encompass 48 auditing standards issued successively in 2006 and 2010, as well as a series of audit guidelines, guidance documents, manuals, and question-and-answer materials released in recent years.

Promoting and maintaining the continuous and comprehensive convergence of professional standards is both the technical foundation for the internationalization of the accounting profession and an inevitable requirement for supporting China’s economy in its drive toward internationalization. Currently, China’s Certified Public Accountant (CPA) practice standards have achieved mutual recognition of equivalence with Hong Kong’s auditing standards and professional ethics codes, receiving widespread recognition and high praise both domestically and internationally. The International Auditing and Assurance Standards Board (IAASB) and the World Bank (WBG) have highly commended this effort, noting that “China’s strategy for improving accounting and auditing standards and enhancing the quality of practice has become a model worthy of emulation by other countries.” The International Federation of Accountants (IFAC) has also expressed strong appreciation and affirmation of China’s proactive stance in integrating international auditing standards into its own CPA standards and continuously pursuing dynamic convergence. The convergence of the auditing standards system with international auditing standards places China’s CPA profession on the same technological platform as its international counterparts, laying a solid foundation for accounting firms to grow stronger, expand their scale, and go global.

V. A Continuing Education System Oriented Toward Lifelong Learning

Certified Public Accountants provide high-end services to the public based on their intellectual capital, professional expertise, and practical experience. Conducting continuing education to continuously maintain and enhance their professional competence and practice standards, and shifting from a mindset of “I’m required to learn” to “I want to learn,” is of great significance for strengthening the development of talent within the profession.

The continuing education system for the Certified Public Accountant (CPA) profession primarily comprises three key components: institutional foundations, training models, and training organization. First, an institutional foundation has been established, oriented toward maintaining members’ competence. Among these, the “Guiding Opinions on Strengthening Talent Development in the Industry” (also known as the “Thirty Measures for Talent Development”) provides comprehensive guidance on talent-related work within the industry; the “China CPA Competency Guidelines” sets out specific objectives and implementation pathways for CPA education, examinations, and training; the “China CPA Continuing Education System” and its supplementary regulations standardize the required hours of continuing education, training methods, and evaluation criteria for CPAs; and the “Interim Measures for Continuing Education of Non-Practicing Members of the China Association of Certified Public Accountants” establish a procedural framework—drawing on international best practices—for the application, organization, and certification of continuing education for non-practicing members. Second, a “phased and tiered” talent development model has been put in place for the CPA profession, with continuing education and training aimed at maintaining competence. Emphasis is placed on cultivating industry-leading (and reserve) talents as well as internationally-oriented professionals. Furthermore, the development of CPA specializations at higher education institutions is promoted as a crucial source of future industry talent. Third, a talent development organizational system combining “self-developed and jointly developed programs” has been established. This includes continuing education for CPAs, training for industry-leading (and reserve) talents, and continuing education for non-practicing members, all organized by the CICPA and local CPA associations. Qualified accounting firms are encouraged to conduct their own internal training programs. Additionally, the three national accounting institutes in Beijing, Shanghai, and Xiamen serve as joint training bases, offering high-end training programs targeted at industry-leading (and reserve) talents and key personnel from accounting firms. Furthermore, high-end talent training programs are conducted in collaboration with overseas accounting professional organizations.

The industry’s continuing professional development training programs mainly include remote (video) education workshops, face-to-face training courses, seminars, and advanced study classes. The provincial, autonomous region, and municipal accounting associations across the country—totaling 31 entities—have already established remote education networks, with an average annual training enrollment of nearly 20,000 participants. Additionally, the three national accounting institutes provide annual training for over 6,000 individuals. Through the Industry Leading (and Reserve) Talent Development Program, 279 trainees have been selected in 10 batches to participate in the Industry Leading Talent Training Program, of whom 58 have successfully graduated. In collaboration with the Association of Chartered Accountants in England and Wales, the Institute of Public Accountants of Australia, and the Hong Kong Institute of Certified Public Accountants, joint training programs for ACA, IPP, and QP qualifications have been promoted, enabling 112 certified public accountants to obtain professional qualifications recognized by their respective countries and regions. As of the end of 2013, a total of 19 higher education institutions had established specialized programs for certified public accountants, with an enrolled student body exceeding 6,000 and nearly 30,000 graduates. The Chinese Institute of Certified Public Accountants has, in successive batches, selected a total of 777 outstanding students from these specialized programs to undertake overseas internships.

VI. A Supervision and Inspection System Guided by Integrity, Ethics, and Professional Quality

Professional quality is the lifeline for the survival and development of the certified public accountant profession. Strengthening integrity education and integrity-based constraints, as well as conducting professional quality inspections, are crucial for enhancing the industry's professional ethics and improving its practice quality.

The Certified Public Accountant (CPA) profession has established a regulatory framework for annual report audits, with a primary focus on the quality of audits conducted on listed companies’ annual reports. This framework includes an inspection system for firm practice quality, aimed at enhancing education and providing disciplinary warnings; a disciplinary and appeal mechanism designed to address violations; a professional integrity information monitoring system centered around “registration”; and a qualification review system that emphasizes professional competence. As a result, the industry’s regulatory system is becoming increasingly sophisticated. In particular, the inspections of CPA firms’ practice quality are centered on implementing the risk-oriented regulatory philosophy. The focus of these inspections has been shifted toward systematic risk assessments: securities firms are inspected every three years, while other firms are inspected every five years. The inspection approach adopts a systematic risk assessment methodology characterized by “periodicity, independent oversight, and risk-based inspection pathways,” thereby aligning with major international regulatory systems.

In 2011, the European Commission adopted a resolution recognizing that China’s audit regulatory system is equivalent to that of the EU. From 2004 to 2013, accounting associations at all levels conducted a total of 14,020 inspections of accounting firms, imposing industry sanctions on 2,229 firms and 4,237 certified public accountants found to have committed violations.

VII. An International Cooperation System Oriented Toward the “Going Global” of Accounting Firms

The certified public accountant (CPA) profession attaches great importance to international exchanges and cooperation, actively building a platform for international collaboration and exchange within the CPA industry. By leveraging global resources and drawing on international best practices, the profession is driving industry development, creating favorable conditions for the implementation of industry strategies and internationalization efforts, and facilitating the industry’s “going global.” As a result, a multi-level, multi-faceted international cooperation system has been established, enabling the CPA profession to participate in international accounting affairs and engage in international exchanges through various channels and approaches.

The Chinese Institute of Certified Public Accountants actively participates in international affairs, enhancing the status and voice of China’s CPA profession within the global accounting community. In 1996 and 1997, the CICPA successively joined the Confederation of Asia-Pacific Accountants (CAPA) and the International Federation of Accountants (IFAC), and has continuously served as a director or nominated representative on their boards. Currently, a total of seven representatives dispatched and recommended by the profession hold positions in various international and regional accounting professional organizations, including the International Federation of Accountants, the Confederation of Asia-Pacific Accountants, the International Auditing and Assurance Standards Board, the International Ethics Standards Board for Accountants, and the Committee on Small and Medium-Sized Firms. These representatives actively participate in major international accounting and auditing decision-making processes and in the formulation of international standards and rules.

The Chinese Institute of Certified Public Accountants has established close exchange and mutual visit relationships with professional accounting organizations in major countries and regions. As of the end of 2013, the CICPA had established friendly relations with more than 50 overseas accounting professional organizations and had signed over 30 cooperation agreements and memoranda of understanding with more than 20 of them.

Actively promote accounting firms “going global.” Nineteen firms have joined international accounting networks, and 70 firms have established branches, member firms, or liaison offices overseas.

8. A development strategy system oriented toward strengthening and expanding.

The five major strategies for industry development represent a crucial strategic framework for achieving transformative growth in the sector and constitute a key task for the industry during the 12th Five-Year Plan period. Among these, the strategy of strengthening and expanding the industry is guided by four supporting pillars: a talent-development strategy, a strategy for aligning with international standards, a strategy for developing new business areas, and an industry-wide informationization strategy.

Formulate and implement guidelines to support accounting firms in becoming stronger and larger, and promote large accounting firms to enhance their strength and scale while going global and adopting brand-based management. Issue guidelines for the standardized development of small and medium-sized accounting firms, encouraging them to focus on specialization and excellence, fostering a diversified development landscape, reducing competitive pressures arising from homogeneous business practices among firms, and promoting their standardized and integrity-driven operations, thereby laying a solid foundation for the industry’s growth and expansion. At the same time, implement a talent-development strategy to provide the necessary human resources for strengthening and scaling up; carry out a strategy for aligning accounting standards with international norms to remove technical barriers and facilitate the “going global” efforts of strong and large firms; adopt a new business-expansion strategy to offer market support for their growth and expansion; and comprehensively advance an informationization strategy to fully equip the certified public accountant profession with information technology.

Currently, the competitiveness and development capabilities of accounting firms have significantly improved. In 2013, the entire industry achieved business revenues of 56.321 billion yuan, maintaining double-digit rapid growth for many consecutive years and outpacing the global accounting industry’s growth rate. The firms provide professional services to over 3.5 million enterprises, administrative institutions, and public institutions nationwide, and offer audit and attestation services—as well as other specialized services—to nearly 2,500 listed companies. Their business operations span countries and regions including the United States, Singapore, Japan, Australia, Malaysia, and Hong Kong, China.

9. A Party-building system guided by political guarantees

Since the 17th National Congress of the Party, the Party Central Committee has attached great importance to Party building within social organizations. With the support and guidance of the Organization Department of the CPC Central Committee, the CPC Committee of the Chinese Certified Public Accountants Industry was established under the leadership of the Party Group of the Ministry of Finance, serving as the leading body for Party building in the industry. The Party building work in the industry is closely aligned with the industry’s actual conditions, adhering to the principle of simultaneously promoting Party building and business development. A management system for Party building in the industry has been established—characterized by the integration of vertical and horizontal approaches and the full utilization of the role of industry Party organizations—thus rapidly achieving “full coverage” of both organizational structures and work within the industry’s Party. This has opened up a new path for strengthening Party building in social organizations.

Since 2009, industry Party committees have successively carried out thematic annual campaigns focusing on the development of systems, mechanisms, institutions, networks, and integrity. These efforts have yielded significant results in addressing the challenges of integrating Party building with business operations, overcoming weak links in both Party and business development, and enhancing the overall level of Party and business integration. By the end of 2013, Party committees (or Party general branches) for the certified public accountant industry had been established in all provinces (autonomous regions, municipalities) as well as in 199 prefectural-level cities that are economically developed and have a large number of accounting firms and practicing Party members. Nationwide, there were a total of 3,361 Party organizations within accounting firms, with 37,722 Party members. Since 2011, two individuals from the industry have been elected as delegates to the 18th National Congress of the Communist Party of China; one has been elected as a deputy to the 12th National People's Congress; five have been elected as members of the 12th National Committee of the Chinese People's Political Consultative Conference; three industry Party committees have been awarded the title of “National Advanced Grassroots Party Organization”; six grassroots Party organizations and one Communist Party member have received special national honors for pioneering and outstanding achievements; and ten certified public accountants have been honored with the title of “National Outstanding Accounting Professional” and the “National May Day Labor Medal.”

X. An industry organization system oriented toward service, supervision, management, and coordination.

As the legally mandated regulatory body for the certified public accountant profession, the Association of Certified Public Accountants plays a vital role in industry governance and represents an important innovation in the social governance system. After years of exploration, the association has now established a governance structure that integrates four key elements: legal authorization, government oversight, democratic management, and Party-building support. The association’s council and standing council exercise their functions of democratic decision-making and management over major industry matters, thereby safeguarding members’ central role and their right to participate in democratic governance. Under the leadership of the Party group within the financial authorities, the Association of Certified Public Accountants carries out industry management and service activities, fulfilling the duties assigned by the Certified Public Accountant Law, those delegated by the Party group of the financial authorities, and those stipulated in the association’s articles of association. Associations at all levels adhere to the guiding principles of service, supervision, management, and coordination; they uphold the unity of serving certified public accountants and serving the public; they maintain the integration of industry management and industry services; and they ensure the unity of Party leadership and democratic management. By actively expanding the scope of management and service activities, enhancing management and service effectiveness, and intensifying coordination efforts, the association has established a robust industry organizational system.

(This article was originally published in “China CPA Industry Development Report 2014,” published by Lixin Accounting Press, and written by Chen Yugui, Chang Zhian, and Lu Bing.)