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1、CONTENTS Error! No text of specified style in document. July 2012 | 1-800-330-3772 | IBISWorld Industry Report 7431 Auditing, Accounting second-tier players; and small operators. Key External Drivers The key sensitivities affecting the performance of the Auditing, Accounting growth in enterprise a
2、nd establishment numbers in 2008 mainly resulted from industry deregulation concerning foreign enterprises. In 2009, 63 new share listings were issued on the main stock market boards, and 36 new IPOs were issued on growth enterprise markets (GEMs). Total IPO financing volume of A-listed shares was $
3、26.8 billion, increasing significantly from 2008. Although the economic slowdown resulted in lower expenditure from enterprises on consulting services, industry revenue grew 4.9% in 2009 due to stronger IPO activity. In 2010, 491 new IPOs were issued on Chinese and overseas capital markets, with a f
4、inancing value of almost $107.0 billion, up 88.0% over 2009. In addition, 117 new share listings were issued in GEMs with a financing value of $17.2 billion. Expanding demand for auditing services from IPO activities drove 12.5% growth for the year. In 2011, affected by the declining stock market an
5、d shrinking IPO numbers, total IPO value of A-listed shares dropped by 41.6% to $41.7 billion. Consequently, the industrys income from IPO audit activities also fell. However, the large number of IPOs in 2010 brought expanding demand for annual audit services during 2011 and industry revenue increas
6、ed by 14.4% to $7.1 billion. WWW.IBISWORLD.COM.CN Auditing, Accounting Shu Lun Pan Certified Public Accountants; and Yangcheng CPA. Registered capital totaled $6.3 million after the merger, and the number of employees totaled 2,000. Zhong Tian Hua Zheng (Beijing) CPA Co. Ltd. originated from the Zho
7、ng Tian Hua Zheng Group, which provides securities, futures, audit and taxation services for financial organizations. Shu Lun Pan Certified Public Accountants Co. Ltd. was founded in 2000 in Shanghai. It provides taxation, audit and securities businesses related services. During the three-year perio
8、d from 2000 to 2003, five establishments were set up in Xinjiang, Jiangsu province, Hainan province, Zhuhai and Hangzhou. Yangcheng CPA Co. Ltd. was incorporated in 1984, providing various professional services including accounting, auditing, assets appraisal, taxation, management consulting and IT
9、management. The company has 10 establishments in Foshan, Nansha, Huizhou and Hong Kong. In 2005, it ranked 33rd in the industry with revenue of $6.8 million, an increase of 12.5% from 2004. In 2010, total operating revenue of the firm amounted to $126.5 million, up by 30.4% over 2009. The number of
10、CPAs was 832 in 2010, up by 23.4% from 2009. WWW.IBISWORLD.COM.CN Auditing, Accounting & Tax Services in China July 2012 33 Shu Lun Pan CPA Management Co. Ltd. - financial performance Year Revenue US Million Dollars Growth % change Employees* Units Growth % change 2002 12.2 N/C 223 N/C 2003 13.7 12.
11、3 252 13.0 2004 18.5 35.0 273 8.3 2005 22.4 21.1 308 12.8 2006 27.6 23.2 361 17.2 2007 48.8 76.8 417 15.5 2008 95.9 96.5 679 62.8 2009 97.0 1.1 674 -0.7 2010 126.5 30.4 832 23.4 SOURCE: THE CHINESE INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS NOTE: *CERTIFIED PUBLIC ACCOUNTANTS (CPAS) Other Players Chi
12、na Rightson Yuehua Certified Public Accountants China Rightson Yuehua Certified Public Accountants was established in 2008 after Yuehua CPA Co. Ltd. merged with China Rightson Certified Public Accountants. At the end of 2010, China Rightson Yuehua Certified Public Accountants had more than 1,300 CPA
13、s. The firm has 19 branches in major cities in China, providing audit services to more than 1,000 clients. Before its merger with Yuehua CPA Co., Ltd., China Rightson Certified Public Accountants was one of the largest accounting firms in China. It was founded by three large accounting firms previou
14、sly affiliated to the Ministry of Finance, State Taxation Bureau, and the Ministry of Electricity. The company ranked ninth in 2006, with revenue amounting to $21.2 million. Yuehua CPA Co. Ltd. was the first certified public accounting firm in China, providing auditing and evaluation services for se
15、curities businesses, auditing and registered capital identification for large and medium enterprises, and auditing for financial institutes and tax representatives. Yuehua CPA Co. Ltd. ranked sixth in 2006 in terms of revenue. Daxin Certified Public Accountants Daxin Certified Public Accountants was
16、 established in 1985, as one of the member firms of Horwath International. The companys revenue totaled $99.0 million in 2010. Daxin Certified Public Accountants provides taxation, audit, assets appraisal, and management advisory services to enterprises all around China. Its head offices are located
17、 in Beijing and Wuhan. The company has offices in more than 20 cities in China including Shanghai, Qingdao, Chongqing, Shandong and Guangxi, employing a total of 1311 staff, of which 527 are CPAs. ShineWing Certified Public Accountants ShineWing Certified Public Accountants is one of the largest loc
18、al accounting firms in China, providing auditing, taxation, financial and management consultant services, as well as capital evaluation. The WWW.IBISWORLD.COM.CN Auditing, Accounting & Tax Services in China July 2012 34 company set up an auditing team in charge of Japanese businesses in July 2003. I
19、n 2010, the revenue of ShineWing totaled $87.3 million, up by 13.2% from 2009. There were 1,040 CPAs in the company at the end of 2010. Zhongshen-Yatai Certified Public Accountants Co. Ltd. Zhongshen-Yatai Certified Public Accountants Co. Ltd. was established in 2008 with registered capital of $2.7
20、million after China Audit Certified Public Accountants merged with Yatai Certified Public Accountants. Currently, the company has 589 CPAs. In 2010, the company made $75.4 million. China Audit Certified Public Accountants was established in 1988, affiliated to the National Audit Office of the People
21、s Republic of China. It was reformed into China Audit Certified Public Accountants in 1999. Wanlong Certified Public Accountants Wanlong Certified Public Accountants was established after the consolidation of several well-known accounting firms in China, including Beijing Zhongtianheng, Wanlong (Sha
22、nghai), Wanglong (Shandong), Wanlong (Liaoning), Wanlong (Shanxi), Wanlong (Guangdong). The company provides a large range of audit and assurance services, construction project management advice, asset appraisal, taxation, and management advisory services. The revenue of Wanlong Certified Public Acc
23、ountants amounted to $57.3 million in 2008, increasing by 123.8% from 2007. The number of CPAs increased to 556, up by 49.9% from 371 in 2007. WWW.IBISWORLD.COM.CN Auditing, Accounting & Tax Services in China July 2012 35 Operating Conditions Capital Intensity The level of capital intensity is low.
24、This is a knowledge-intensive industry This industry relies heavily on personal and professional inputs to generate revenue Low requirements for capital inputs The labor intensity of this industry is determined by the ratio of capital to labor costs. Wages and depreciation from the cost structure ar
25、e used as proxies to calculate the ratio. The capital to labor intensity ratio is expected to be 1:5.5 in 2012, implying that for every dollar spent on capital, $5.50 is spent on wages. Accounting firms within this industry provide services that need professionals with abundant knowledge and skills
26、related to tax, auditing and accounting procedures and laws, and other legislation, regarding financial activities within companies across all industries. Wage levels for these professional can therefore be quite high. Technology & Systems The level of technology change is medium. Technology and sys
27、tems outline the level of technological advancement of this industry. This industry has experienced a medium level of technology change in recent years due to: Computer technology Computerized technologies have a major effect on the operators within this industry. Accounting firms tend to update the
28、ir computers regularly, and more are utilizing portable computers and laptops for office and client activities. Accounting software The common use of accounting software and related packages has enhanced the productivity with many companies working on professional accounting and financial software,
29、such as UFIDA Software Co., Ltd. International standardization of accounts The regulators from 104 countries and representatives of the International Organization of Securities Commissions accepted the concept of setting an international accounting standard for cross-border listings in May 2000. Chi
30、na had already issued the New Accounting Policy in February 2006. Internet development Internet technologies have sped up the IT processes in this industry. Efficiencies have increased significantly with the utilization of Accounting Information Systems. Further, the electronic lodgment of tax retur
31、ns has increased dramatically since an on-line system was launched, and this trend is expected to continue in the future. WWW.IBISWORLD.COM.CN Auditing, Accounting & Tax Services in China July 2012 36 Revenue Volatility The level of volatility is medium. Industry revenue volatility has not been high
32、 in recent years. High and relatively steady industry revenue growth has been mainly due to Chinas strong economic growth and greater demand for audit, taxation and advisory services from listed companies and other economic activities. Revenue growth slowed from 2007 to 2009. A large industry revenu
33、e increase in 2007 was mainly driven by Chinas buoyant securities markets. High IPO activity levels stimulated demand for audit services from companies that prepared to be listed. The slowdown in revenue growth in 2008 and 2009 was the result of weaker economic growth in China, as well as the large
34、fluctuations of Chinas stock market. Lower company expenditure and financing activities curbed demand for the industrys services. In 2010, with the recovery of Chinese economy and rapid increasing IPO activities, demand for auditing services increased accordingly, industry revenue recovered with a g
35、rowth of 12.5%. Regulation & Policy The level of regulation is heavy and the trend is decreasing. In general, establishments within the Auditing, Accounting and Tax Services Industry in China are subject to regulations from the following government institutions: The Ministry of Finance of the People
36、s Republic of China (MFPRC) is responsible for drafting the laws and regulations related to accounting activities within companies as well as supervising the operations of accounting firms. The Ministry is also in charge of managing the CPAs and auditing tasks within accounting firms. Moreover, MFPR
37、C also cooperates with the China Securities Regulatory Commission to investigate listed companies accounting information provided by accounting firms. The Chinese Institute of Certified Public Accountants (CICPA) is a self-regulated organization within the industry, founded in November 1988. CICPA i
38、s a branch of the The Ministry of Finance PRC is responsible for examining the operation of accounting firms annually and drafting the regulations and norms for CPAs, and supervising the process. The organization also takes charge of examinations for Certified Public Accountants. The National Audit
39、Office of the Peoples Republic of China was established in 1983 according to the Audit Law of Peoples Republic of China. It is in charge of drafting and implementing the laws and regulations regarding auditing activities. It also supervises listed companies accounting information audited by accounti
40、ng firms. The China Securities Regulatory Commission (CSRC) was set up in October 1992. It is responsible for drafting regulations and rules related to securities and futures, as well as supervising the issues, listing, trading and related businesses of securities and futures. CSRC also takes charge
41、 of investigating the qualifications of securities practitioners, and examining the accounting information provided by accounting firms. The Peoples Bank of China is in charge of supervising financial institutions and is also engaged in financial activities. In 2000, the Peoples Bank of China and th
42、e Ministry of Finance issued information on the accounting firms dealing with financial activities, providing the qualifications for accounting firms engaged in financial businesses. The State Administration for Industry & Commerce (SAIC) is responsible for managing the registers of companies or org
43、anizations. Accounting firms without SAICs permission cannot be engaged in providing accounting services. The qualifications of accounting firms are also listed. WWW.IBISWORLD.COM.CN Auditing, Accounting & Tax Services in China July 2012 37 Regulations The General Agreement on Trades in Services (GA
44、TS) elaborates the regulations for accounting services including auditing, bookkeeping and accounting. The Chinese accounting market was required to be opened up completely, with wholly foreign-owned accounting firms permitted in China after December 2007, after China had joined the World Trade Orga
45、nization for six years. Law of the PRC on Certified Public Accountants stipulates the requirements of establishing accounting firms and the application process. According to this law, the financial departments of peoples government of provinces, autonomous regions or municipalities directly under th
46、e Central Government are responsible for supervising the operation of accounting firms. New establishments should be subject to the approval of the local financial department. This law also points out that the businesses of accounting firms will not be limited by the administrative regions or specif
47、ic industries, unless specified by the laws, administrative rules and regulations. Administration of Sino-Foreign Cooperative Accounting Firms Tentative Procedures was issued and implemented in 1996, this regulation stipulates that cooperative firms must join the Chinese Institute of Certified Publi
48、c Accountants to be under its supervision. The requirements to establish a cooperative firm and the application process are elaborated in the procedures, and processes to set up establishments are also stated. The Accounting Firms Examination and Approval and Surveillance Tentative Method is a regul
49、ation issued and implemented in 2005, which clarifies the requirements and processes from the establishment to termination of accounting firms and their branches. According to this method, the operations of accounting firms are supervised by the Ministry of Finance of PRC and its branches, the National Audit Office of PRC, etc. The legal responsibilities of accounting firms are also elaborated in the method. Temporary Provisions on Accounting Firms from Hong Kong and Macau Executing Audit Services in Main