Notice on Printing and Issuing the Interim Provisions on the Audit of Offshore Listed Companies by Chinese Certified Public Accountants

Postdate: 2016-11-09

The finance departments (bureaus) of the provinces, autonomous regions and municipalities directly under the Central Government and the Shenzhen Municipal Finance Committee:

    In order to standardize the accounting firms to conduct overseas listing audits of Chinese Mainland enterprises and to promote domestic and overseas accounting firms to carry out business cooperation in accordance with the law and safeguard the interests of investors and the capital market order, according to the Law of the People's Republic of China on Certified Public Accountants and other relevant laws and regulations, Ministry of Finance has formulated the Interim Provisions on the Audit of Offshore Listing of Chinese Mainland Enterprises by Certified Public Accountants, which is hereby promulgated and shall come into effect as of July 1, 2015.

 

Interim Provisions of Accounting Firms Engaging in the Audit of Overseas Listing of Chinese Mainland Enterprises

 

Article 1 In order to standardize the accounting firms to engage in the overseas listing auditing of Chinese Mainland enterprises and to promote the business cooperation between domestic and overseas accounting firms in accordance with the law, the interests of investors and the order of the capital market shall be safeguarded. In accordance with the Law of the People's Republic of China on Certified Public Accountants and other relevant laws Regulations, the formulation of the Interim Provisions.

 

    Article 2 The term "overseas listing audit" as mentioned in the Interim Provisions refers to the financial affairs provided by an accounting firm in relation to the listing, listing, or similar issuance of stocks, bonds or other securities directly or indirectly outside mainland China by enterprises. Reporting audits and post-IPO auditing of annual financial reporting services.

The relevant auditing business of the mainland enterprises that issue shares, bonds or other securities directly or indirectly outside the territory and listed is not a temporary practice. The overseas accounting firms shall not enter into the territory to carry out the relevant business through temporary practice.

An overseas listing audit of an enterprise established legally in the Mainland of China and holding more than 50 percent of the shares, equity, property rights, voting rights or other similar interests directly or indirectly by the investors of the Hong Kong Special Administrative Region, Macao Special Administrative Region and Taiwan The Interim Provisions apply.

 

    Article 3 Chinese Mainland enterprises shall independently choose the Mainland China accounting firms or overseas accounting firms that meet the requirements of the laws and regulations and regulatory requirements of the place of listing to provide overseas listing audit services for them.

 

    Article 4 The Chinese Mainland accounting firms authorized to provide audit services for the overseas listing of Mainland enterprises by overseas regulatory bodies shall carry out the relevant audit business in accordance with laws, regulations and practicing standards.

 

    Article 5 Where an enterprise in the Mainland of China entrusts an overseas accounting firm to audit in accordance with the law, the entrusted overseas accounting firm shall conduct business cooperation with the accounting firm of the Mainland of China. The two sides shall sign a written agreement on business cooperation, agree on the division of duties and the rights and obligations of both parties, and the audit working papers formed in the territory shall be deposited in the territory by the Chinese Mainland accounting firms.

 

    Article 6 Where a foreign accounting firm is entrusted to conduct the overseas listing auditing business of a Chinese Mainland enterprise, it shall have priority to set up with the Mainland according to law. It shall have the experience of auditing the initial public offering of financial statements or auditing of the annual financial report after listing, having a good quality of practice and professional ethics. 3 years of professional practice has not been suspended for more than 6 months of administrative punishment of the partnership (including a special general partnership) accounting firm to carry out business cooperation.

The foreign accounting firm entrusted shall bear the responsibility for auditing according to law.


    

Article 7 The Hong Kong Special Administrative Region, the Macao Special Administrative Region and the Taiwan Region accounting firms are entrusted to carry out the overseas listing audits of Mainland enterprises. They shall have the priority of setting up with the Mainland according to law. They shall have 25 or more Chinese certified public accountants with good practice quality and professional ethics. And has not been suspended for practicing for more than 6 months in the last 3 years, the Company has conducted business cooperation with the accounting firm.

Trustees of the Hong Kong Special Administrative Region, the Macao Special Administrative Region and Taiwan accounting firms shall bear the audit responsibilities according to law, and enjoy the leading rights of business distribution and distribution of benefits in business cooperation.

 

    Article 8 Where an overseas accounting firm engages in the business of overseas listing audits of Chinese enterprises in the Mainland, it shall report to the provincial finance department where the Chinese enterprises are located at least 7 days prior to the entry of the auditing business (see Appendix 1 for details) unit. At the same time, should be provided with the commissioned enterprises signed a copy of the audit business agreement and the Mainland of China signed a business cooperation agreement written copy of the agreement.

If the overseas accounting firm fails to timely report or file the information (including the written engagement agreement and the business cooperation written agreement) is not true and incomplete, the financial department at or above the provincial level shall notify it and order it to correct it and forward it to the country ) Of the relevant regulatory agencies; the circumstances are serious, be announced, from the date of publication within 5 years shall not engage in mainland Chinese enterprises listed on the audit business.

If the overseas accounting firm fails to cooperate with the Mainland accounting firm to conduct the audit work or save the audit working paper, the financial department at or above the provincial level shall order it to make corrections within a prescribed time limit; if the deadline is not corrected and the illegal practice is practiced, the financial department above the provincial level shall make a public announcement; Within five years from the date of the announcement, shall not engage in the overseas listing audit of Mainland enterprises.

 

    Article 9 Where an overseas accounting firm is engaged in the business of conducting overseas listing audits of Chinese enterprises in the Mainland, it shall report the business cooperation with the Mainland accounting firms in written form within 60 days after the business report to the local financial department of the locality where the Chinese enterprises are located (see Attachment 2), and copy to the Ministry of Finance.

If the overseas accounting firm fails to report or report the information in an unreal and incomplete manner, it shall be notified by the financial department at or above the provincial level and ordered to make corrections within a prescribed time limit and forward it to the relevant regulatory authority of the country (region) for settlement. If the circumstances are serious, Within five years from the date of the announcement shall not engage in mainland China listed companies outside the business audit.

 

    Article 10 In the event that a Mainland China accounting firm is engaged in the business of conducting overseas listing audits of Chinese enterprises in the Mainland, it shall file an annual report on the implementation of the Mainland enterprises in accordance with the Provisional Measures for the Examination and Approval of Accounting Firms (Article 24 of the Ministry of Finance) The specific requirements shall be implemented in accordance with the provisions of the Ministry of Finance on the annual reporting work. If the filing date is not true or incomplete, the financial department at the provincial level shall notify the local finance department and order it to make rectification within a time limit and focus on the supervision.

 

    Article 11 Where an enterprise in Mainland China entrusts an overseas accounting firm to provide an overseas listing audit service, it shall prompt the overseas accounting firm to give preference to the business cooperation of the Mainland accounting firms in accordance with the provisions of Articles 6 to 7 of this Interim Provisions.

 

    Article 12 The Chinese Mainland enterprises and the accounting firms that provide them with the services of overseas listing auditing shall strictly abide by the Provisions on Strengthening the Management of Securitization and Archives Related to the Issuance of Securities and Listing Abroad (China Securities Regulatory Commission, State Secrecy Bureau, Archives of the Bulletin [2009] 29).

If the overseas Chinese enterprises are required to have access to the auditing working papers by overseas judicial departments or regulatory bodies, or if the overseas supervisory organs need to access the audit working papers to carry out the supervisory functions, they shall follow the supervisory agreement reached by the domestic and overseas regulatory authorities. .


 

Article 13 The overseas accounting firms referred to in the Interim Provisions include the foreign accounting firms established in accordance with the law, the accounting offices of the Hong Kong Special Administrative Region of China, the accounting offices of the Macao Special Administrative Region of China and the accounting firms of the Taiwan region.

 

     Article 14 This Interim Provisions shall take effect as of July 1, 2015.

 

     Attachment: 1.Report of overseas auditors to the auditing business information

(2) Business cooperation report between overseas accounting firm and mainland China accounting firm

 

Ministry of Finance

May 26, 2015