Editor's Note Over the past five years, China’s certified public accountant profession has comprehensively advanced efforts in various areas—including integrity building, talent development, improvement of the examination system, standard-setting, strengthening and expanding accounting firms, and the exploration of new business opportunities—achieving remarkable results. Following the previous issue, this newspaper continues to present... “ The 12th Five-Year Plan ” A showcase of achievements in the development of the Certified Public Accountant profession during this period. The key word for this issue is “convergence of standards with international practices.”

Accounting and auditing information is the internationally recognized language of business—only... “ Language ” Only through convergence can economic activities such as cross-border mergers and acquisitions and IPO restructurings proceed more smoothly.

Chinese Institute of Certified Public Accountants (hereinafter referred to as “ Chinese Institute of Certified Public Accountants ” We attach great importance to the development of professional practice standards and are committed to promoting the continuous and dynamic convergence of China’s auditing standards with international auditing standards. The CPA profession continues to deepen its implementation of the strategy for international convergence of standards and has achieved new breakthroughs in areas such as participating in the development of international standards, conducting equivalence negotiations, and advancing the establishment of professional ethical norms.

Continuously promote the dynamic international convergence of professional practice standards.

Over the past five years, the Chinese Institute of Certified Public Accountants has continuously promoted the international convergence and effective implementation of auditing standards. To facilitate the adoption and implementation of the new auditing standards system, we have developed relevant practice guides and FAQs to enhance the ability of certified public accountants to understand and apply these standards. In coordination with the implementation of the Corporate Internal Control Standards, we have formulated guidelines for auditing corporate internal controls, providing guidance to certified public accountants in conducting internal control audits. Moreover, we have promptly issued specialized technical guidelines for specific types of engagements, ensuring an adequate supply of professional standards needed to support the expansion of new business areas.

In accordance with the requirements of the International Convergence Strategy for Professional Practice Standards, the Chinese Institute of Certified Public Accountants has drawn on the latest developments in international auditing standards to revise its guidelines. 38 The new auditing standards and application guidelines for Chinese Certified Public Accountants have achieved continuous and comprehensive convergence with international auditing standards. At the same time, relevant practice guides and Q&A documents have been developed to closely monitor and study the implementation of the auditing standards. Professional judgment guidelines have also been issued, and active efforts have been made to provide training on the new auditing standards.

To support the implementation of the enterprise internal control standards, the CICPA has... 2011 Year 10 The Ministry of Finance issued the “Implementation Guidelines for Enterprise Internal Control Audit,” which, building upon the “Enterprise Internal Control Audit Guidelines,” supplements and refines the execution of each key stage in internal control audits. 2011 Year 12 The month saw the release of the “Guidelines for Preparing Audit Working Papers for Internal Control in Enterprises.” 2015 Year 2 To further guide certified public accountants in better implementing the internal control audit approach, address challenges encountered in practical internal control audits of enterprises, and mitigate audit risks, we have developed the “Answers to Questions on Enterprise Internal Control Audits,” based on feedback collected from members regarding their needs and in light of industry practice.

In addition, as China’s socialist economic system with Chinese characteristics continues to improve, the scope of practice for certified public accountants is steadily expanding. Based on the new requirements and emerging characteristics of various professional fields, the Chinese Institute of Certified Public Accountants has developed a series of specialized technical guidelines, thereby establishing a comprehensive system of practice standards for Chinese certified public accountants that covers all new types of business areas and technical requirements. This system provides certified public accountants with thorough and specific guidance, enabling them to deliver high-quality professional services and maintain industry credibility while contributing to national development and putting into practice the Scientific Outlook on Development. These efforts include the formulation and issuance of the “Guidelines for Auditing Financial Statements of Hospitals,” the “Guidelines for Auditing Financial Statements of Foundations,” the “Guidelines for Auditing Financial Statements of Higher Education Institutions,” and the “Guidelines for Auditing Financial Statements of Commercial Banks,” as well as the research and drafting of the “Guidelines for Performance Evaluation of Fiscal Expenditures by Accounting Firms.”

Enhance the international voice of the CPA profession.

To enhance China’s voice and influence in the international accounting profession, the Chinese Institute of Certified Public Accountants has established the International Auditing Standards Research Group and the Professional Ethics Issues Research Group. It has also formulated relevant working procedures to standardize and strengthen the ongoing research on international auditing standards and professional ethics codes. The Institute closely monitors developments in international auditing standards, international professional ethics codes, and internal control auditing standards, and has set up feedback mechanisms and support systems for committee members. It promptly provides constructive feedback on draft international standards and sends representatives to participate in relevant international conferences, actively engaging in the formulation of international standards and enhancing its capacity to influence the development of international rules.

Furthermore, building on the ongoing and comprehensive convergence of accounting standards, China’s CPA profession has also achieved new breakthroughs in equivalence negotiations, actively consolidating the outcomes of international convergence. 2011 Year 9 Moon 5 On [date], the Chinese Institute of Certified Public Accountants and the Hong Kong Institute of Certified Public Accountants signed a joint statement in Hong Kong confirming that the newly revised Mainland audit standards have achieved ongoing equivalence with the Hong Kong audit standards. 2011 Year 11 Moon 7 On [date], the two sides signed a joint statement in Beijing confirming the equivalence of their respective codes of professional ethics, thereby recognizing that the Mainland’s code of professional ethics is equivalent to Hong Kong’s code of professional ethics. In annual financial statement audits, an increasing number of Mainland-listed companies operating in Hong Kong are conducting audits in accordance with Mainland auditing standards.

According to statistics, as of... 2015 Year 2 Month, in 204 Home H In the annual report audit of stocks, there are a total of 45 The firm was audited in accordance with Mainland China auditing standards. The CICPA has also translated and published the Chinese standards in English, and similarly translated and published publications of the International Federation of Accountants’ standards, thereby enhancing mutual learning and exchange.

To meet the higher ethical standards for certified public accountants imposed by the development of China’s socialist market economy and to enhance the international image of China’s CPA profession, the Chinese Institute of Certified Public Accountants continues to advance the development of professional ethics guidelines and has formulated related explanations and answers to frequently asked questions. 2009 Year 10 month, the “Code of Professional Ethics for Chinese Certified Public Accountants” was released, effective from 2010 Year 7 Moon 1 Effective from the date of promulgation, this achieves full convergence with the International Code of Ethics for Accountants. To help certified public accountants implement the spirit of the Code, ... 2011 The organization’s experts have compiled the “Interpretation of the Code of Professional Ethics for Chinese Certified Public Accountants.” 2014 In the same year, to address practical issues encountered by certified public accountants in understanding and implementing the Code of Ethics, the “Answers to Questions on the Code of Ethics for Chinese Certified Public Accountants” was released.

Experiences and Insights from the Development of Professional Practice Guidelines

“ International Convergence Strategy for Professional Standards ” The task is both glorious and arduous—encompassing not only alignment with and convergence toward international standards, but also innovation and improvement in institutional development. It serves as the driving force behind taking the certified public accountant profession to a new level. Looking back over the past five years of development, we’ve drawn several valuable lessons and insights.

First, we must treat the development of professional practice standards and their alignment with international norms as a foundational project for China’s advancement of its market economy system and its engagement in international economic cooperation.

Historical experience shows that the development of an auditing standards system must be aligned with the current state of socio-economic development. The simpler the socio-economic environment, the lower the audit risk, and the simpler the auditing standards system tends to be. Conversely, as the socio-economic environment becomes increasingly complex and audit risks rise accordingly, there is an objective need for a more comprehensive auditing standards system. This also underscores that the construction of such a standards system requires constant examination of new circumstances, addressing emerging challenges, formulating new rules, and continuously refining the system in step with socio-economic developments.

Actively promoting a strategy of international convergence of accounting standards is not only an effective way to enhance the quality and transparency of China’s accounting information, but also a practical requirement dictated by China’s macroeconomic situation. The integration of China’s economy with international markets and global capital fundamentally necessitates that China adhere to a strategy of international convergence of accounting standards and reduce— “ Language ” Obstacles to this end will create a favorable international environment for the sustained, stable, and healthy development of our country’s economy. Therefore, the construction of a standards system and its alignment with international norms should always serve the overarching goal of reform and opening-up and the attraction of foreign investment. The development of auditing standards and their alignment with international norms should be treated as a fundamental project in China’s efforts to advance the construction of a market-oriented economic system and strengthen international economic cooperation.

Second, scientifically sound organizations and procedures for developing standards are the guarantee of standard quality.

The system of auditing standards involves the interests of various stakeholders, including investors, the certified public accountant profession, and enterprises, and thus exhibits strong stakeholder relevance. A scientific and democratic standard-setting process is crucial for ensuring the quality of these standards and fully reflecting the will of all relevant stakeholders. In the course of building the auditing standards system, the Chinese Institute of Certified Public Accountants has paid close attention to the demands of all sectors of society, fully leveraged the expertise of specialists, convened numerous deliberation meetings, and thoroughly incorporated feedback from all parties. Moreover, it has repeatedly solicited public comments on auditing standards from the profession, relevant government departments, and the general public, and has carefully examined, studied, and addressed each piece of feedback received, thereby embodying the spirit of scientific and democratic decision-making.

On the issue of international convergence of accounting standards, the Chinese Institute of Certified Public Accountants has engaged in a series of communications with international standard-setting bodies. We have held working meetings with these international standard-setting bodies on specific topics, including the Chinese government’s and industry organizations’ fundamental principles and strategies for international convergence of accounting standards, the various technical and non-technical challenges facing international convergence, a detailed comparison between China’s auditing standards and international auditing standards along with an analysis of the reasons for their differences, and key unresolved issues. During these meetings, we explained our positions and received their full understanding and support.

Third, the development of guidelines must adhere to the principle of safeguarding the public interest.

The certified public accountant (CPA) profession is entrusted with the critical function of auditing and attesting to the quality of accounting information, playing an important role in safeguarding the public interest. To this end, throughout the development of professional standards, it is essential always to uphold the public interest as a key principle, emphasize CPAs’ responsibility to detect fraud, further strengthen requirements for CPA independence, impose stricter quality standards on audit procedures, audit evidence, and audit working papers, and consistently use the protection of the public interest as the benchmark for evaluating these standards.

Fourth, while promoting the strategy of international convergence of accounting standards, we must also effectively address the issue of localizing international standards.

International standards are based on the economic environments and accounting models of developed countries such as the UK and the US. For emerging economies, countries undergoing economic transition, and non-English-speaking countries or regions, international standards have largely not been derived from the practical experiences of accounting professionals. “ Imported product ” the colors. Especially for our country, there are significant differences from developed countries such as the U.S. and the UK in terms of language, cultural traditions, and legal environment. Therefore, how to localize these guidelines—transforming international guidelines into something that is truly suited to our own context—is a critical question. “ Imported product ” Turning the outcomes of international convergence of accounting standards into the conscious practice of a broad base of certified public accountants and transforming these outcomes into high-quality accounting information is a critical issue that we must prioritize in advancing our strategy for international convergence of accounting standards.