Image Credit: The Economist
The Ministry of Finance announced on Friday the imposition of penalties on an accountant and an overseas accounting firm for business violations. Zhang Yunhe, a mainland-registered accountant, will face an administrative penalty of 30,000 yuan (approximately 4,203 U.S. dollars) for conducting unauthorized cross-border auditing services. Additionally, Elite Partners CPA Limited, a Hong Kong-registered accounting firm, was found to have breached regulations by auditing the 2021 financial statements of five mainland companies listed in Hong Kong without proper reporting to provincial-level financial authorities.
The Ministry stated that the accounting firm will be barred from providing overseas auditing services to mainland enterprises for five years, effective immediately. This marks the first instance of the Ministry imposing regulatory measures on an overseas accounting firm for such violations.
An official from the Ministry emphasized their commitment to enhancing supervision over cross-border auditing services. They noted that these actions are part of broader efforts to strengthen regulatory oversight and improve audit quality through increased global cooperation.
According to the Ministry, Zhang Yunhe’s unauthorized activities and Elite Partners CPA Limited’s regulatory breaches highlighted significant concerns regarding the adherence to auditing standards. The Ministry expressed that stricter penalties and enhanced regulations would serve as a deterrent against future violations.
In its announcement, the Ministry reaffirmed its dedication to maintaining the integrity of financial reporting and safeguarding the interests of investors. By intensifying supervision and fostering international collaboration, the Ministry aims to uphold high standards in the auditing profession and ensure transparency and reliability in financial statements.
This development underscores the Ministry’s resolve to address regulatory violations decisively and uphold rigorous audit standards to protect the financial system’s integrity.