Four overseas-registered accounting firms, including three from Hong Kong and one from Taiwan, have been granted temporary licenses to start auditing businesses in mainland China.
L&P CPA Ltd., PricewaterhouseCoopers (PwC) and Clement C.W. Chan & Co. from Hong Kong were granted five-year audit licenses until Dec. 24, 2018, while Moores Rowland CPAs from Taiwan was granted a one-year license until Dec. 24, 2014, according to statements from China’s Ministry of Finance (MoF) on Thursday.
The ministry also announced that it will further simplify administrative approval for audit services firms in China by granting more administrative power to provincial finance departments.
The audit firms will only have to apply at one provincial finance department when seeking to provide services in two or more provinces, autonomous regions and municipalities, the MoF said.
The new rules took effect on Wednesday. Provincial finance departments should submit information about temporary licenses they have granted for the past year at the end of June every year.
The MoF’s latest moves will help improve auditing standards in China as more foreign accounting firms can start auditing businesses in the country, observers say. Hong Kong and Taiwan-based auditing firms, which have strong knowledge about Chinese companies’ culture and accounting style, will benefit more from the new initiative than their Western counterparts.
Meanwhile, the policy initiative can help more small and medium-sized enterprises raise funds by meeting the international accounting standards.
Investors may be given choice on cash or share dividends
Mainland authorities are devising rules for scrip dividends, taking their lead from Hong Kong where investors can choose whether to take cash or share dividend based on their investment needs and cash flow, the China Securities Journal reported Friday, citing unidentified sources. Mainland investors can now only accept firms’ decisions on cash or share dividends, with the latter the most popular option. Official opinions published on improving protection for small investors promote the idea of a system of multiple-channel investment returns, which could help encourage listed firms to distribute dividends.
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