By staff reporter Song Yanhua

Chinese public accountants and audit firms will be required to publicly disclose basic information about their operations, a practice that the head of the Chinese Institute of Certified Public Accountants (CICPA) praised as “the beginning of the establishment of a Chinese audit industry information disclosure system.”

CICPA announced January 22 the decision for an “Information Disclosure System,” which is aimed at improving the international credibility of China’s more than 100 audit firms. It requires that individual accountants as well as firms release information on the CICPA Web site about each accountant’s education and professional background, a firm’s operations and personnel, and comprehensive details about the nation’s auditing  industry.

However, public accountants with the world’s Big Four auditors have criticized the new policy for failing to require disclosure of sensitive information, including litigation and personnel changes, which are of greater interest to the public.

The Beijing government is pushing to standardize and internationalize the nation’s audit standards. As part of the push, officials from the central government and the Hong Kong Special Administrative Region signed a memorandum in December aimed at reconciling mainland and Hong Kong accounting standards.

The memorandum said mainland companies listed on the Hong Kong exchange will not have to file reports according to Hong Kong standards. And mainland standards need not be followed by any Hong Kong-listed companies that list on the Shanghai or Shenzhen exchanges, which may be opened to foreign listings soon.

Zhonghui Zhou, chief accountant for the China Securities Regulatory Commission, told Caijing that China’s market system would receive more recognition in the West if Chinese accounting practices were effectively interchangeable with standards used in Europe and the United States.