(Adopted by the 4th Session of the Standing Committee of the Eighth National People's Congress on October 31, 1993, promulgated by Order No.13 of the President of the People's Republic of China on October 31, 1993, and effective on January 1, 1994)
Contents
Chapter I General Provisions
Chapter II Examination and Registration
Chapter III Business Scope and Rules
Chapter IV Public Accountants Office
Chapter V Certified Public Accountants Association
Chapter VI Legal Responsibility
Chapter VII Supplementary Provisions
Chapter I General Provisions
Article 1
For the purposes of bringing into play the role of attestation and service of certified public accountants in socioeconomic activities, strengthening the control on certified public accountants, safeguarding the social and public interests and the legitimate rights and interests of investors, and promoting sound development of the socialist market economy, this Law is enacted.
Article 2
Certified public accountants are the practicing persons who, according to law, acquire the certificates of certified public accountant and are commissioned to undertake the auditing, accounting consultancy and accounting service businesses.
Article 3
Public accountants offices are the organizations which are established according to law and engage in certified public accountants' businesses.
A certified public accountant shall, when rendering businesses, join an public accountants office.
Article 4
Certified public accountants associations are the social organizations composed of certified public accountants. The Chinese Association of Certified Public Accountants is the national organization of certified public accountants and the certified public accountants associations in provinces, autonomous regions and municipalities directly under the Central Government are regional organizations of certified public accountants.
Article 5
The departments for finance of the State Council and of people's governments of provinces, autonomous regions and municipalities directly under the Central Government shall carry out supervision over and directives to certified public accountants, public accountants offices and certified public accountants associations.
Article 6
Certified public accountants and public accountants offices must, in performing their businesses, abide by laws and administrative regulations.
Certified public accountants and public accountants offices perform their businesses independently and impartially according to law, and are protected by law.
Chapter II Examination and Registration
Article 7
The State implements an unified national qualification examination system for certified public accountants. The measures for the unified national examination of certified public accountants shall be formulated by the department of the State Council for finance, and the Chinese Association of Certified Public Accountants organizes to implement thereof.
Article 8
A Chinese citizen who has an education at a junior college of higher learning or above, or who has a medium-level professional title or above in accounting or relevant professions, may apply to participate in the unified national qualification examination for certified public accountants; those citizens with senior-level professional title in accounting or relevant professions may be exempt from examination on some subjects.
Article 9
Those who participated and passed the unified national qualification examination for certified public accountants and have engaged in the auditing work for more than two years may apply for registration with the certified public accountants associations of provinces, autonomous regions and municipalities directly under the Central Government.
With exception of circumstances listed in Article 10 of this Law, the certified public accountants association taking cognizance of the application shall grant the registration thereof.
Article 10
Under one of the following circumstances, the certified public accountants association taking cognizance of the application does not grant the registration:
1. not having the full capacity of civil conduct;
2. being punished for criminal offense, and not yet up to five full years
from the date of completing a criminal sentence to the date of application for registration;
3. being penalized administratively, removed from the office or more
seriously penalized for committing serious mistakes in financial affairs, accounting, auditing, enterprise management or other economic management works, and not yet up to two full years from the date of penalty or discipline decision to the date of application for registration;
4. being penalized by revoking the certificate of certified public accountant, and not yet up to five full year from the date of penalty decision to the date of application for registration; and
5. other circumstances as prescribed by the department of the State Council for finance not to grant the registration.
Article 11
Certified public accountants associations shall submit the name lists of their registered certified public accountants to the finance department of the State Council for the record. Where the finance department of the State Council discovers that the registration of a certified public accountants association does not comply with the provisions of this Law, it shall notify the corresponding certified public accountants association to cancel the registration.
A certified public accountants association which, pursuant to Article 10 of this Law, does not grant the registration, shall notify in writing the applicant within 15 days from the date on which the decision is made. The applicant who disagrees with the decision may, within 15 days from the date of receiving the notice, apply to the finance department of the State Council or the finance department of the province, autonomous region or municipality directly under the Central Government for a reconsideration.
Article 12
To the applicants for whom registration is granted, the certified public accountants associations shall issue the certificate of certified public accountant which is uniformly produced by the finance department of the State Council.
Article 13
In case that a person who has obtained the certificate of certified public accountant, except for the circumstances as provided for in Paragraph 1 of Article 11 of this Law, is under one of the following circumstances after the registration, the certified public accountants association which grants the registration shall cancel the registration and take the certificate of certified public accountant back:
1. losing the capacity of civil conduct completely;
2. being punished for criminal offense;
3. being penalized administratively, removed from the office or more seriously penalized for committing serious mistakes in financial affairs, accounting, auditing, enterprise management or other economic management works; and
4. ceasing, on his or her own initiative, to carry out business of the certified public accountant for a full year or over.
In case a party whose registration is canceled disagrees with the decision, he or she may, within 15 days from the date of receiving the notice on canceling the registration and taking the certificate of certified public accountant back, apply to the finance department of the State Council or the finance department of the province, autonomous region or municipality directly under the Central Government for a reconsideration.
The persons whose registrations are canceled pursuant to the first paragraph may apply for re-registration, but must comply with the provisions of Articles 9 and 10 of this Law.
Chapter III Business Scope and Rules
Article 14
Certified public accountants shall undertake the following auditing businesses:
1. auditing the accounting statements of enterprises and issuing auditing reports;
2. examining and verifying the capital of enterprises and issuing capital verification reports;
3. handling auditing business in the course of enterprise merger, split and liquidation affairs, and issuing corresponding reports; and
4. other auditing businesses as provided for by laws and administration regulations.
The reports which are issued by certified public accountants in performing the auditing businesses according to law have the force of proof.
Article 15
Certified public accountants may undertake accounting consultancy and accounting service businesses.
Article 16
The public accountants office shall, on a uniform basis, accept engagement of the businesses undertaken by its certified public accountants and sign commissioning contracts with the commissioning parties.
The public accountants offices shall bear civil responsibility for the businesses undertaken by their certified public accountants pursuant to the preceding paragraph.
Article 17
A certified public accountant in practicing the business may, according to need, consult relevant accounting materials and documents of the commissioning party, look through the business sites and facilities of the commissioning party, and request the commissioning party to provide other necessary assistance.
Article 18
In case that a certified public accountant has interested relation with the commissioning party, he or she shall withdraw therefrom; and the commissioning party is entitled to demand for the withdrawal of the certified public accountant therefrom.
Article 19
Certified public accountants shall be obliged to keep confidentiality of business secrets they got familiar with in the course of performing their businesses.
Article 20
In case that any of the following circumstances arises in the course of practicing the auditing businesses, the certified public accountant shall refuse to issue the corresponding report:
1. The commissioning party indicates him or her to make untrue or improper attestation;
2. The commissioning party does not furnish relevant accounting materials and documents intentionally; and
3. Due to other unreasonable demands by the commissioning party, the report to be issued by the certified public accountant could not make correct description and statement on important matters and items of financial accounting affairs.
Article 21
Certified public accountants must, in practicing their auditing businesses, issue reports in accordance with the work procedures as prescribed in the practicing criterion and the rules.
A certified public accountant may not, in practicing the auditing business and issuing the report, have the following acts:
1. knowing that the financial accounting disposition on important matters and items of the commissioning party contradicts to relevant regulations of the State but not pointing out therefor;
2. knowing that the financial accounting disposition of the commissioning party would damage the interests of the persons who use the report or other interested parties but concealing therefor or not making true to the fact reports;
3. knowing that the financial accounting disposition of the commissioning party would lead to critical misunderstanding of the persons who use the report or other interested parties but not pointing out therefor; and
4. knowing that the accounting statements of the commissioning party contain other untrue contents about important matters and items but not pointing out therefor.
The provisions of the preceding paragraph shall apply to the certified public accountants who, in accordance with the practicing criterion and rules, should know about the commissioning party's acts listed in the preceding paragraph.
Article 22
Certified public accountants may not have the following acts:
1. purchasing or selling the stocks and bonds of the unit being audited,
or purchasing other property possessed by the unit being audited or the individual being audited during the course of practicing the auditing business and within the period of time as provided for by laws and administrative regulations as not allowing to purchase or sell the stocks and bonds of the unit being audited or to purchase other property possessed by the unit being audited or the individual being audited;
2. asking for or accepting remuneration or other property beyond the agreement of the commissioning contract, or seeking other unjustified benefits by taking the advantage of practicing the business;
3. accepting engagement to press for payment of debts;
4. allowing others to practice the business in their name;
5. practicing the business at two or more public accountants offices concurrently;
6. giving publicity on their ability for the purpose of soliciting businesses; and
7. other acts in violation of laws and administrative regulations.
Chapter IV Public Accountants Office
Article 23
A public accountants office may be established by certified public accountants through partnership.
The partners to a partnership public accountants office, using their respective property, bear the responsibility for the debt of the partnership public accountants office in accordance with the proportion of the partners' contributed capital or the arrangement of the agreement. The partners assume joint responsibility for the debt of the public accountants office.
Article 24
A public accountants office may, when satisfying the following conditions, become a legal entity bearing limited liability:
1. the registered capital not less than 300,000 yuan;
2. having a certain number of full time employees, of which at least five are certified public accountants; and
3. the business scope and other conditions as prescribed by the finance department of the State Council.
The public accountants office which bears limited liability uses all its assets to bear its liability of debts.
Article 25
The establishment of a public accountants office is subject to approval by the finance department of the State Council or the finance department of province, autonomous region or municipality directly under the Central Government.
The applicant shall, when applying for the establishment of a public accountants office, submit to the organ of examination and approval the following documents:
1. an application form;
2. designation, organizational structure and business place of the public accountants office;
3. articles of association of the public accountants office, and the partnership agreement if there is such a partnership agreement;
4. name list, resumes and relevant documentary documents of the certified public accountants;
5. names, resumes and relevant documentary documents of the main persons in charge and partners of the public accountants office;
6. capital contribution certificate of the public accountants office which bears limited liability; and
7. other documents as required by the organ of examination and approval.
Article 26
The organ of examination and approval shall, within 30 days from the date of receiving the application documents, decide to approve or to deny the application.
Public accountants offices approved by the finance departments of people's governments of provinces, autonomous regions and municipalities directly under the Central Government shall be reported to the finance department of the State Council for the record. Where the finance department of the State Council finds an approval is improper, it shall, within 30 days from the date of receiving the report for the record, notify the organ which approves the establishment for re-examination.
Article 27
The establishment of the branch organization of a public accountants office must be subject to approval by the finance department of the people's government of the province, autonomous region or municipality directly under the Central Government where the branch organization is situated.
Article 28
Public accountants offices shall pay taxes according to law.
The public accountants office sets up a profession risk fund and purchases profession insurance in accordance with the regulations of the finance department of the State Council.
Article 29
Public accountants offices, in practicing their businesses, shall not be limited by administrative jurisdiction and profession; but except where the law and administrative regulations provide otherwise.
Article 30
Where the commissioning parties commission public accountants offices to carry out their businesses, any unit or individual may not interfere.
Article 31
The provisions of Articles 18 to 21 of this Law shall apply to the public accountants offices.
Article 32
Public accountants offices may not have the acts listed in Article 22 (1) to (4), (6) and (7) of this Law.
Chapter V Certified Public Accountants Association
Article 33
A certified public accountant shall join the certified public accountants association.
Article 34
The articles of association of the Chinese Association of Certified Public Accountants shall be formulated by the national assembly of its members, and shall be reported to the finance department of the State Council for the record; the articles of association of the certified public accountants associations in provinces, autonomous regions and municipalities directly under the Central Government shall be formulated by the members' assembly of provinces, autonomous regions and municipalities directly under the Central Government, and shall be reported to the finance departments of people's governments of provinces, autonomous regions and municipalities directly under the Central Government for the record.
Article 35
The Chinese Association of Certified Public Accountants shall, according to law, draft the practicing criterion and rules for certified public accountants, and implement thereof after submitting to, and approved by, the finance department of the State Council.
Article 36
Certified public accountants associations shall support the certified public accountants to perform businesses according to law, protect their legitimate rights and interests, and report their opinions and suggestions to relevant departments.
Article 37
Certified public accountants associations shall carry out annual assessment over the qualifications of certified public accountants and their practicing conditions.
Article 38
Certified public accountants associations acquire according to law the legal person status as a social organization.
Chapter VI Legal Responsibility
Article 39
Where a public accountants office violates the provisions of Article 20 or 21 of this Law, the finance department of the people's government at or above the provincial level shall give it a warning, confiscate its ill-gotten gains, and may impose a fine of more than one times and less than five times of its ill-gotten gains concurrently; if the case is serious, the finance department of the people's government at or above the provincial level may order it to temporarily suspend it from practicing the business or cancel it therefor.
Where a certified public accountant violates the provisions of Article 20 or 21 of this Law, the finance department of the people's government at or above the provincial level shall give a warning; if the case is serious, the finance department of the people's government at or above the provincial level may suspend him or her from practicing the business or revoke his or her certificate of certified public accountant.
Where a public accountants office or a certified public accountant, in violation of the provisions of Article 20 or 21 of this Law, intentionally issues the auditing report or capital verification report which is not true to the fact, and constitutes a crime, criminal responsibility shall be investigated according to law.
Article 40
Where an unit undertakes the businesses of certified public accountants as provided for in Article 14 of this Law without approval, the finance department of the people's government at or above the provincial level shall order it to stop the illegal act, confiscate its ill-gotten gains, and may impose a fine of more than one times and less than five times of its ill-gotten gains concurrently.
Article 41
A party concerned which does not agree with the administrative penalty decision may, within 15 days from the date of receiving the notice of penalty decision, apply for a reconsideration to the next higher organ of the organ which makes the penalty decision; the party concerned may also directly bring a suit to the people's court within 15 days from the date of receiving the notice of penalty decision.
The reconsideration organ shall, within 60 days from the date of receiving the reconsideration application, make a reconsideration decision. The party concerned which does not agree with the reconsideration decision may, within 15 days from the date of receiving the reconsideration decision, bring a suit to the people's court. If the reconsideration organ fails to make a reconsideration decision within the time limit for reconsideration, the party concerned may, within 15 days from the expiration of the time limit for reconsideration, bring a suit to the people court.
In the event of a party concerned failing both to apply for reconsideration or to bring a suit to the people's court within the time limits, and to comply with a penalty decision, the organ which makes the penalty decision may apply to the people's court for enforcement.
Article 42
A public accountants office which, in violation of the provisions of this Law, causes damage and loss to the commissioning party or other interested parties, shall bear the liability for compensation according to law.
Chapter VII Supplementary Provisions
Article 43
A certified public auditor working with the auditing office, after being verified as having the qualification of a certified public accountant, may practice businesses as provided for in this Law, and the measures for qualification verification, supervision, guidance and control thereof are separately provided by the State Council.
Article 44
An application of a foreigner for participating in the unified national qualification examination and registration of China for a certified public accountant shall be treated in accordance with the principle of reciprocity. The establishment of resident representative organizations of foreign public accountants offices in China must be subject to approval by the finance department of the State Council. The establishment of a Sino-foreign co-operative public accountants office to be jointly set by the foreign public accountants office and the Chinese public accountants office must be subject to approval by the finance department of the State Council after being examined and approved by the competent foreign economic and trade department of the State Council or the department authorized by the State Council and the people's government at the provincial level.
A foreign public accountants office which needs to practice relevant business on the temporary basis in the territory of the People's Republic of China, with exception of the circumstances as provided for in the preceding paragraph, must be subject to approval by the finance department of the people's government of the relevant province, autonomous region or municipality directly under the Central Government.
Article 45
The State Council may, in accordance with this Law, formulate the rules for implementation.
Article 46
This Law shall enter into force on January 1, 1994. The "Regulations of the People's Republic of China for Certified Public Accountants" promulgated by the State Council on July 3, 1986 shall be repealed simultaneously.
