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Law of the People's Republic of China on certified public accountants

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(the twelfth National People's Congress, August 31, 2014 Adopted at the 10th meeting of the standing committee)

Chapter I general provisions

Article 1 this law is formulated with a view to giving full play to the role of certified public accountants in authentication and service in social and economic activities, strengthening the administration of certified public accountants, safeguarding the public interests and the legitimate rights and interests of investors, and promoting the healthy development of the socialist market economy.

Article 2 a certified public accountant is a professional who has obtained the certificate of certified public accountant in accordance with law and accepts entrustment to engage in auditing, accounting consulting and accounting services.

Article 3 a public accounting firm is an institution established according to law and undertaking the business of certified public accountants.

A certified public accountant shall join a public accounting firm in performing business.

Article 4 the institute of certified public accountants is a social organization composed of certified public accountants.The institute of certified public accountants of China is the national organization of certified public accountants, and the institute of certified public accountants of provinces, autonomous regions and municipalities directly under the central government is the local organization of certified public accountants.

Article 5 the financial department of the state council and the financial department of the people's governments of provinces, autonomous regions and municipalities directly under the central government shall supervise and guide certified public accountants, public accounting firms and institutes of certified public accountants in accordance with law.

Article 6 certified public accountants and public accounting firms must abide by laws and administrative regulations in carrying out their business.

Certified public accountants and public accounting firms shall independently and impartially perform their business according to law and shall be protected by law.

Chapter ii examination and registration

Article 7 the state applies a unified national examination system for certified public accountants.The measures for the unified national examination of certified public accountants shall be formulated by the financial department of the state council and implemented by the Chinese institute of certified public accountants.

Article 8 Chinese citizens who have graduated from institutions of higher learning or higher, or who have obtained intermediate or higher technical titles in accounting or related majors may apply to take part in the national unified examination for certified public accountants;Persons with senior technical titles in accounting or related majors may be exempted from examination in some subjects.

Article 9 those who have passed the national unified examination for certified public accountants and have engaged in auditing services for more than two years may apply to the institutes of certified public accountants of provinces, autonomous regions or municipalities directly under the central government for registration.

Except under the circumstances listed in article 10 of this law, the institute of certified public accountants that has accepted the application shall grant registration.

Article 10 under any of the following circumstances, the institute of certified public accountants that has accepted the application shall not grant registration:

(1) not having full capacity for civil conduct;

(2) within five years from the date of the completion of the execution of the criminal punishment to the date of applying for registration due to the criminal punishment;

(3) to be subject to an administrative sanction, or to be removed from office, or to a sanction of more than two years, from the date of the decision on the sanction or sanction to the date of applying for registration, because he has committed serious mistakes in financial affairs, accounting, auditing, enterprise management or other economic management;

(4) being punished by revoking the certificate of a certified public accountant for less than five years from the date of the decision on the punishment to the date of applying for registration;

(5) other circumstances in which registration is not permitted as stipulated by the financial department of the state council.

Article 11 the institute of certified public accountants shall submit the list of persons approved for registration to the financial department of the state council for the record.If the financial department of the state council finds that the registration of an institute of certified public accountants is not in conformity with the provisions of this law, it shall notify the relevant institute of certified public accountants to revoke the registration.

If the institute of certified public accountants refuses to register in accordance with the provisions of article 10 of this law, it shall notify the applicant in writing within 15 days from the date of the decision.Where an applicant has objections, he may, within 15 days from the date of receipt of the notification, apply for reconsideration to the financial department of the state council or to the financial department of the people's government of the province, autonomous region or municipality directly under the central government.

Article 12 the institute of certified public accountants shall issue the certificate of certified public accountants uniformly formulated by the financial department of the state council.

Article 13 a person who has obtained a certificate of certified public accountants, except as provided for in the first paragraph of article 11 of this law, shall be revoked of his registration and have his certificate of certified public accountants withdrawn by the institute of certified public accountants that approved the registration in any of the following circumstances:

(1) having completely lost capacity for civil conduct;

(2) being subjected to criminal punishment;

(3) to be given an administrative penalty or removed from office or given a sanction of more than one level because of serious mistakes made in financial affairs, accounting, auditing, enterprise management or other economic management;

(4) having voluntarily ceased to perform the business of certified public accountants for one full year.

If the party concerned disagrees with the cancellation of registration, he may apply for reconsideration to the financial department of the state council or the financial department of the people's government of the province, autonomous region or municipality directly under the central government within 15 days from the date of receiving the notice of cancellation or withdrawal of the certificate of certified public accountant.

A person whose registration has been revoked in accordance with the first paragraph may apply for registration again, provided that the provisions of articles 9 and 10 of this law are complied with.

Chapter iii business scope and rules

Article 14 certified public accountants shall undertake the following audit services:

(1) to examine the accounting statements of enterprises and issue audit reports;

(2) verifying the capital of the enterprise and issuing capital verification reports;

(3) to handle audit services in matters of merger, division or liquidation of enterprises, and to issue relevant reports;

(4) other audit services as stipulated by laws and administrative regulations.

Reports issued by certified public accountants in performing audit services in accordance with the law shall have certifying effect.

Article 15 certified public accountants may undertake accounting consulting and accounting services.

Article 16 the services to be undertaken by certified public accountants shall be accepted uniformly by the public accounting firm to which they belong and the entrustment contracts shall be signed with the clients.

A public accounting firm shall bear civil liability for the business undertaken by its certified public accountants in accordance with the provisions of the preceding paragraph.

Article 17 in performing business, certified public accountants may, when necessary, consult the relevant accounting materials and documents of the client, inspect the client's business site and facilities, and require the client to provide other necessary assistance.

Article 18 certified public accountants who have an interest in the client shall withdraw;The client shall have the right to request his withdrawal.

Article 19 certified public accountants shall have the obligation to keep confidential the trade secrets they come to know in the course of their business operations.

Article 20 certified public accountants who are engaged in auditing services shall refuse to issue relevant reports under any of the following circumstances:

(1) where the client indicates to him that the evidence is false or improper;

(2) the client intentionally fails to provide relevant accounting materials and documents;

(3) the report issued by certified public accountants fails to correctly state important financial accounting matters because the client has other unreasonable requirements.

Article 21 in performing audit services, certified public accountants must issue reports in accordance with the working procedures established in the standards and rules of practice.

Certified public accountants may not commit any of the following ACTS when producing reports in the course of auditing services:

(1) failing to indicate clearly that the client's financial accounting treatment of important matters contravenes the relevant provisions of the state;

(2) to conceal or make an untrue report, knowing that the client's handling of the financial accounting directly harms the interests of the users of the report or other interested parties;

(3) failing to specify while fully aware that the client's handling of the financial accounting results in major misunderstanding by the users of the report or other interested parties;

(4) failing to specify important matters in the client's accounting statements, knowing that they contain other untrue contents.

The provisions of the preceding paragraph shall apply to certified public accountants who, in accordance with the standards and rules of practice, should have known about the client's conduct as mentioned in the preceding paragraph.

Article 22 certified public accountants shall not commit any of the following ACTS:

(1) during the course of carrying out audit services, buying or selling the stocks or bonds of the auditees or buying other property of the auditees or individuals within the time limit prescribed by laws or administrative regulations;

(2) to demand or accept remuneration or other property other than as stipulated in an entrustment contract, or to seek other illegitimate interests by taking advantage of his business performance;

(3) to accept entrustment to collect debts;

(4) allowing others to perform business in their own name;

(5) to be engaged in business at the same time in two or more public accounting firms;

(6) advertising their capabilities to solicit business;

(7) other ACTS in violation of laws and administrative regulations.

Chapter iv public accounting firms

Article 23 public accounting firms may be established by a partnership of certified public accountants.

The debts of the public accounting firm established by the partnership shall be borne by the partners with their own property in proportion to the proportion of their contribution to the capital contribution or as stipulated in the agreement.The partners shall be jointly and severally liable for the debts of the accounting firm.

Article 24 if a public accounting firm meets the following requirements, it may be a legal person with limited liability:

(1) the registered capital of not less than 300,000 yuan;

(2) having a certain number of full-time employees, at least five of whom are certified public accountants;

(3) business scope and other conditions stipulated by the financial department of the state council.

An accounting firm with limited liability shall be liable for all its assets and liabilities.

Article 25 the establishment of a public accounting firm shall be approved by the financial department of the people's government of a province, autonomous region or municipality directly under the central government.

To apply for the establishment of a public accounting firm, the applicant shall submit the following documents to the examination and approval authorities:

(1) an application form;

(2) the name, organizational structure and business premises of a public accounting firm;

(3) the articles of association of the public accounting firm and the partnership agreement, if any, shall be submitted;

(4) name list, resume and relevant supporting documents of certified public accountants;

(5) names, resumes and relevant supporting documents of the principal principals and partners of the public accounting firm;

(6) a certificate of capital contribution from a public accounting firm with limited liability;

(7) other documents required by the examining and approving authorities.

Article 26 the examination and approval authorities shall decide whether to approve or disapprove the application within 30 days from the date of receiving the application documents.

Public accounting firms approved by the financial departments of the people's governments of provinces, autonomous regions and municipalities directly under the central government shall be reported to the financial department of the state council for the record.If the financial department of the state council finds that the approval is improper, it shall, within 30 days from the date of receipt of the archival filing report, notify the original examination and approval authorities to review the matter.

Article 27 the establishment of a branch of a public accounting firm shall be subject to the approval of the financial department of the people's government of the province, autonomous region or municipality directly under the central government where the branch is located.

Article 28 public accounting firms shall pay taxes in accordance with law.

Public accounting firms shall establish occupational risk funds and handle occupational insurance in accordance with the provisions of the financial department of the state council.

Article 29 public accounting firms shall not be restricted by administrative regions or trades in accepting business;Except as otherwise provided by laws and administrative regulations.

Article 30 no entity or individual may interfere in entrusting a public accounting firm to handle its business.

Article 31 the provisions of articles 18 to 21 of this law shall apply to public accounting firms.

Article 32 a public accounting firm shall not commit any act listed in items (1) to (4), (6) or (7) of article 22 of this law.

Chapter v institute of certified public accountants

Article 33 certified public accountants shall join the institute of certified public accountants.

Article 34 the articles of association of the Chinese institute of certified public accountants shall be formulated by the national congress of members and submitted to the financial department of the state council for the record.The articles of association of the institutes of certified public accountants of provinces, autonomous regions and municipalities directly under the central government shall be formulated by the congresses of the members of the institutes and submitted to the financial departments of the people's governments of provinces, autonomous regions and municipalities directly under the central government for the record.

Article 35 the Chinese institute of certified public accountants shall formulate standards and rules for the practice of certified public accountants in accordance with law, which shall go into effect after being submitted to the financial department of the state council for approval.

Article 36 the institute of certified public accountants shall support certified public accountants in performing their business according to law, safeguard their lawful rights and interests, and report their opinions and Suggestions to the relevant authorities.

Article 37 the institute of certified public accountants shall conduct annual inspection of the qualifications and practice of certified public accountants.

Article 38 the institute of certified public accountants shall acquire the status of legal person as a social organization in accordance with law.

Chapter vi legal liability

Article 39 if a public accounting firm violates the provisions of article 20 or article 21 of this law, the financial department of the people's government at or above the provincial level shall give it a warning, confiscate its illegal gains and may concurrently impose a fine of not less than one time but not more than five times the illegal gains;If the circumstances are serious, the financial department of the people's government at or above the provincial level may suspend or cancel its business operations.

If a certified public accountant violates the provisions of article 20 or article 21 of this law, the financial department of the people's government at or above the provincial level shall give him a warning;If the circumstances are serious, the financial department of the people's government at or above the provincial level may suspend his business performance or revoke his certificate of certified public accountant.

If a public accounting firm or certified public accountant, in violation of the provisions of article 20 or article 21 of this law, intentionally issues false audit reports or capital verification reports, if the case constitutes a crime, the public accounting firm or certified public accountant shall be investigated for criminal responsibility according to law.

Article 40 where a unit undertakes the business of certified public accountants as prescribed in article 14 of this law without approval, the financial department of the people's government at or above the provincial level shall order it to stop its illegal activities, confiscate its illegal earnings and may concurrently impose a fine of not less than one time but not more than five times its illegal earnings.

Article 41 if a party is not satisfied with the decision on administrative penalty, it may, within 15 days of receiving the notification of the sanction, apply for reconsideration to the authorities at the next higher level over the authorities that have made the sanction decision;The party may also bring a suit directly before a people's court within 15 days of receiving the notification of the decision on punishment.

The administrative body for reconsideration shall, within 60 days after receiving the application for reconsideration, make a reconsideration decision.If the party refuses to accept the reconsideration decision, it may bring a suit before a people's court within 15 days of receiving the reconsideration decision.If the administrative body for reconsideration fails to make a reconsideration decision within the time limit, the party may bring a suit before a people's court within 15 days of the expiration of the time limit for reconsideration.

If, within the time limit, the party concerned neither applies for reconsideration, nor brings a suit before a people's court, nor complies with the decision on sanction, the organ that has made the decision on sanction may apply to a people's court for compulsory execution.

Article 42 if a public accounting firm, in violation of the provisions of this law, causes losses to the client or other interested parties, it shall be liable for compensation according to law.

Chapter vii supplementary provisions

Article 43 certified auditors working in audit firms who are certified as qualified certified public accountants may perform the services prescribed by this law.

Article 44 the application of foreigners for taking the national examination and registration of Chinese certified public accountants shall be handled on the basis of reciprocity.The establishment of a permanent representative office within the territory of China by a foreign CPA firm shall be submitted to the financial department of the state council for approval.The establishment of a chinese-foreign cooperative accounting firm jointly by a foreign public accounting firm and a Chinese public accounting firm shall be submitted to the financial department of the state council for approval after examination and approval by the department in charge of foreign economic relations and trade under the state council or by the department authorized by the state council and the people's government at the provincial level.

Except as provided for in the preceding paragraph, if a foreign public accounting firm needs to transact relevant business temporarily within the territory of China, it must obtain approval from the financial 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 regulations for implementation.

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