Five Of The Work Of CPA Industry In 12Th Five-Year: Industry Regulation

During the "12th Five-Year" period, the supervision of the CPA industry focused on Comrade Xi Jinping's important spirit of "serving the country as the theme and building integrity as the main line", and conscientiously carrying out the spirit of the minister Lou Jiwei's "constantly expanding the depth and breadth of the work of the CPA". He always adhered to the fundamental purpose of "safeguarding the public interest", and constantly improved the supervision of the CPA industry after the supervision of the CPA examination and registration management.

In the past 5 years, the CPA industry has established a system of practice quality inspection system for risk accounting oriented accounting firms (CAS). It has carried out a new round of practice quality inspection of periodic firms and implemented institutional innovation. It has improved the annual audit supervision method with interviews as the starting point, accumulated 77 interviews with offices, and pointed out the audit risk of annual reports, and standardized the mechanism of punishment and assistance to help improve. At all levels, the CPA accumulates 532 firms and 1330 registered accountants, effectively promoting the industry's awareness of integrity and quality of practice.

During the period of 12th Five-Year, the CPA industry established an implementation system risk oriented practice quality inspection system based on the equivalence between China's audit supervision system and the EU's audit supervision system in 2011.

(1) reforming the practice quality inspection system

In 2011, on the basis of thoroughly summarizing the practice of practice quality inspection and drawing lessons from the beneficial experience of foreign counterparts, we carried out a comprehensive reform of the practice quality inspection system, issued the reform plan for the practice quality inspection system of accounting firms, and the practice quality inspection system of accounting firms, and set up a practice quality inspection system based on "periodic inspection as the basis, preventing system risks as the core, reflecting independent supervision requirements, and being consistent with internationally recognized regulatory systems".

After the reform, the practice quality inspection is carried out in accordance with the concept of guarding against system risks, laying equal stress on quality control system inspection and business project quality inspection, laying equal stress on inspection of professional ethics and technical procedure inspection, establishing inspection quality assurance mechanism and laying equal stress on inspection technology, checking the construction of expert team and reforming the inspection system, laying equal stress on the responsibilities of the association of supervisors and implementing the audit responsibility, taking the risk of preventive system as the focus of the practice quality inspection, and guiding the office to shift the focus of work to improving the internal governance mechanism and improving the quality control system so as to effectively enhance the system risk prevention ability of the CPA industry.

(two) carry out a new round of risk management practice in periodic office system.

The implementation of periodic office system risk oriented inspection is an important means to urge firms to improve their practice quality and effectively prevent systemic risks.

During the "12th Five-Year" period, in accordance with the reform plan for the practice quality inspection system of CPA firms, the CPA implemented the practice quality inspection of the securities and futures business qualification Office (hereinafter referred to as the Securities Institute) for 3 years. The provincial associations of Certified Public Accountants implemented the practice quality check of the non securities market in 5 years, and completed a round of periodic professional quality inspection of the national offices, and achieved the full coverage of the systematic risk oriented inspection.

In the past 5 years, the 4900 levels of inspectors have been dispatched by the associations at all levels, 7617 of them have been inspecting, and 74063 have been audited by the company.

Among them, the Chinese ink association directly dispatched 486 inspectors, inspecting the total number of securities firms 42 times, 106 branches, and 561 spot checks.

In carrying out the inspection work, all levels of the CPA adhere to the quality control system inspection results to guide the business project inspection, support the quality control system inspection conclusion with the results of the business project examination, and pay special attention to in-depth analysis to find out the deep-seated problems existing in the company's professional ethics, quality control environment, partner management mechanism, customer relationship and the acceptance and maintenance of specific business, human resources, business execution, etc., and comprehensively review and evaluate the quality control system of the firm, so as to effectively promote the office to enhance the risk awareness of the system and enhance the ability to deal with system risks.

(three) explore systematic risk guidance

The key to implementing effective systematic risk oriented inspection is scientific and reasonable inspection methods.

In the past 5 years, all levels of the association have explored a series of inspection methods aiming at highlighting inspection priorities and improving inspection efficiency.

First, the method of determining the annual inspection focus and checking objects is formed.

According to the development of the industry and the outstanding problems faced by the various associations, the annual development of the annual quality inspection program is formulated and the key points of the inspection work are put forward.

For example, in 2012, aiming at the problem of unfair low price competition in industries and public reaction industries, based on the governance measures formulated by CAS, we identified the low fee business items as the focus of inspection in the practice quality inspection, increased inspection efforts, increased the frequency of inspections and increased the strength of inspection.

On the basis of highlighting the key points of inspection, the associations at all levels have gradually formed a selection mechanism for checking objects comprehensively considering whether the firms are engaged in securities business, business composition, business volume, practicing risk, social influence, and the number of branches.

The two is the method of checking the quality control system.

At all levels, the association of inspection and inspection teams, through risk assessment, studies and analyzes the basic situation, business characteristics and operational risks of the inspected firms. Starting from the quality control system of the firms, combining with the professional judgment of the risk size, it determines the key areas and scope of the inspection, and comprehensively grasps the design and implementation of the key quality control system of the firm, so as to enhance the effectiveness of the audit work.

Three is to improve the business project inspection method.

According to the weak links found in the quality control system inspection, the inspection teams at all levels confirm the nature, scope and key business areas of the inspection of business items.

For the firms with defects in quality control system design, lack of key control links and weak quality control capability, the inspection of specific business items should be strengthened, and problems should be identified through business project inspection, and the loopholes in the quality control system can be disproved, so as to improve the quality control system and enhance the risk prevention ability of the system.

(four) establish a guarantee mechanism for improving inspection quality.

The basis of systematic risk oriented inspection is to check the quality of work.

In the past 5 years, the associations at all levels have continuously strengthened inspection organization management and process control, and explored the formation of inspection quality assurance mechanism.

The first is to enhance the competency and professional ethics of the practice quality inspection team.

The China Association of Certified Public Accountants (AMC) revises the management system of inspectors, improves the selection, training, examination and reward mechanism of inspectors, and sets up a team of professional quality inspectors who are mainly composed of excellent personnel in the office and the backbone of all levels of the association.

At the same time, the ICAC invites industry experts and experienced inspectors to serve as teaching teachers every year, and adopts the training strategy of "one pole to the end", which conveys the concepts, procedures, methods, requirements, inspection cases, and honest government requirements of system risk inspection to the quality inspection personnel of all levels, and helps to promote the inspection team to constantly maintain and improve their competency.

In addition, the formulation of the regulations on the practice of quality inspection shall be extended to "nine prohibits" to expand to "ten prohibits", and inform the firms and all their staff to disclose the telephone and mailbox to the public at all levels of the association's website to receive supervision.

The two is to strengthen technical support and guidance.

At all levels, the association of experts at all levels makes full use of the professional advantages and regulatory resources of the industry to form an expert advisory group, providing technical support for inspection work, guiding and supervising the key links of inspection work, discussing in depth the common problems of the inspection team's feedback, preparing the inspection questions, and accepting the acceptance inspection reports and checking the working papers, so as to ensure that the inspections follow the uniform rules and standards.

The CPA also invites senior CPA to be a visiting researcher of the practice quality inspection every year to solve the technical problems encountered in the inspection process of the inspection teams, review the problems found in the inspection, and improve the rectification proposals for the inspection securities.

The three is to improve the organization and management of intensified inspection.

In order to ensure the orderly conduct of the annual inspection work, the China Association for the examination and co ordinate the inspection of securities firms and non securities firms, and the various levels of the association adhere to the practice of checking the whole country's quality.

The inspection time should be arranged in accordance with the order of the securities department.

The inspectors unified training and scheduling, and selected the backbone of the national inspection committee to carry out the inspection by the CIAC. The provincial Provincial Association of inspectors selected the provincial inspectors to conduct inspections at the local non securities firms.

Check the progress of unified control, at all levels of the association held periodic summing up meeting, to understand the progress of the inspection and difficulties encountered, for the common problems found, timely call conference to properly solve.

The inspection conclusions should be checked in a unified way, and the experts' groups at all levels should review the inspection conclusions of the inspection teams. They could not clearly describe the problems, lack of evidence in the conclusion, and doubt the correctness of the conclusions. The inspection teams should be rechecked to ensure that the inspection conclusions are clear, well documented and appropriate.

The CPA industry has always listed the audit supervision of the annual reports of listed companies as the focus of the industry supervision. In 2003, the audit supervision work of the annual report was launched as a breakthrough with "roasted squid to take home".

In 2011, on the basis of summing up the audit supervision practice of listed companies' annual reports in recent years, we adjusted and perfected the annual audit supervision procedures of listed companies, highlighted the concept of supervision, risk oriented and honest practice of the annual audit supervision of listed companies, and established an audit supervision system for annual reports of listed companies, which is a combination of annual negotiations and post supervision.

(1) focusing on the audit risk of annual reports of listed companies before the audit of annual reports.

CAS insists on organizing industry experts to track the hot spot of domestic capital market before the start of the annual audit work, and to study the risk points faced by the annual report audit, and make a key hint for the audit risks of the annual reports of listed companies.

For example, in 2012, in conjunction with the internal control audit work, we stressed the need to accurately understand and grasp the spirit of the guidelines for enterprise internal control audit and the implementation of the guidelines for enterprise internal control audit.

In 2013, combining with the problem of unfair low price competition in the industry, we emphasized the importance of monitoring the problem of "squash, pick up the house" and unfair low price competition.

In 2014, when the economic growth slowed down and the fluctuation of capital market intensifies, it was suggested that the audit risk of listed companies should be recognized and measured, related party relations and pactions, asset impairment, government subsidies, major unconventional pactions, and continuing operations.

In 2015, according to the situation of downward pressure on the economy, the listed companies, such as industries, agriculture, forestry, animal husbandry and fishery industries, financial instruments and complex derivatives investment enterprises, innovative business prominent enterprises, continuous operating losses, and enterprises such as mergers and acquisitions, and so on, were prompted to audit risks.

(two) innovate supervision and interview work in annual audit.

In 2011, the China Association of Certified Public Accountants (CIC) initiated the annual audit supervision and interview method, and conducted targeted interviews on the audit business of high-risk listed companies, suggesting risk factors and putting forward precautionary measures to guide firms to focus on and respond to relevant audit risks.

First, continue to enrich and expand the theme of interviews.

In the past 5 years, the CIC has been paying close attention to the "malicious home" and unfair competition at the same time. In the meantime, it has designed the appropriate topic of interview for the hot spot and public concerns of the capital market. It has selected more than 50 topics to focus on frequently changing audit institutions, such as profit and loss margins, large fluctuations in performance, serious overcapacity, major asset restructuring, equity disputes and delisting risks. It has organized 50 interviews and interviewed 77 securities firms, involving 84 times of listed companies.

Two, we should gradually increase the frequency of interviews.

From the number of audited interviews in the annual report, the number of 3 batches in 2011 increased to 15 batches in 2015. From the number of firms interviewed, the number increased from 11 times in 2011 to 19 in 2015. From the number of interviews involving listed companies, the number of 11 times from 2011 increased to 23 times in 2015.

Three is to improve the way of work.

Taking full account of the audit work characteristics of the annual report of the company, we will move forward the interview time of the annual audit report, and provide sufficient time for the firm to absorb and draw on the risk warning opinions.

At the same time, we should adopt a more flexible way of interviewing, take face to face interviews and written interviews at the same time, and adopt a face-to-face interview for large scale firms with large number of listed companies.

The four is to focus on systemic risk prevention.

Since the reform of the practice quality inspection system in 2011, the annual audit supervision and negotiation work is not only limited to specific project audit risks, but also increased the concern of the system risk. In the interview, we focused on the design and operation of the quality control system.

At the same time, we should make full use of the results of system risk examination to increase the frequency of interviews and highlight the key points of supervision for large firms with high system risk and large number of listed companies.

Five, it is widely publicized to play a risk warning role from point to point.

After each interview, CAS issued a written reminder of risks to the firm, and issued a press release to inform the whole industry of the same type of business risk and play a risk warning role from point to point.

The CAS has carried out the annual audit supervision and interview by the government departments and the public from all walks of life.

People's daily, financial times, Shanghai Securities Daily, securities daily and other media reported that the China Association for the implementation of the annual audit audit notice.

The negotiable securities all indicated that the annual report audit supervision interview is timely and effective, which is very helpful for the comprehensive annual audit work and effective prevention and control of annual audit risk.

(three) publish audit bulletin, improve data collection and conduct annual report audit analysis.

The summary information of annual reports audit of listed companies can fully reflect the overall audit of capital market, and has important reference functions for various firms, government departments and the public.

Since the audit supervision of annual reports in 2003, the China Association for the record has always attached great importance to the collection and analysis of relevant data and timely released relevant audit information.

First, assign special personnel to guide, supervise and urge the company to report relevant information of annual reports of listed companies, track the disclosure of annual reports of listed companies day after day, pay attention to relevant media reports, and timely remind the firms to take corresponding measures according to the abnormal situation in the annual report disclosure.

Weekly issuance of annual report audit Bulletin of listed companies, summary of annual reports, audit opinions, audit fees and other related information.

From 2011 to 2015, the CAS published 77 reports on the audit of the annual reports, which became the basic data information widely quoted by various industries, media and professional organizations.

The annual audit and adjustment data reported by the securities show that CPA has proposed a total of 19068 billion yuan in the past 5 years for the proposed adjustment of the financial report to the listed companies, including 145 billion 200 million yuan in total profits, 16755 yuan in assets and 86 billion 100 million yuan in taxes payable, so as to effectively filter out false information in the capital market and improve the overall quality of information disclosure in the capital market.

Two, after the audit supervision of annual reports, experts were organized to make a comprehensive analysis of the financial statements audit, internal control audit and annual audit market of listed companies.

On the one hand, we should find out the common problems existing in the audit of annual reports, fully understand and reflect the implementation of audit business in listed companies, so as to further enhance the quality of audit work of annual reports of listed companies; on the other hand, through comprehensive analysis, we should focus on the key areas of the next stage of industry supervision work, and identify the objects of inspection and assistance.

Three, with the purpose of helping education improve, we should improve the mechanism of disciplinary assistance and special inspection.

The purpose of practice quality inspection and annual report audit supervision is to promote the concept of honest practice and improve the quality of practice.

To this end, the CPA industry has established a disciplinary system and a supporting mechanism. In 2011, the CPA Association's disciplinary measures against irregularities were revised.

(1) regulating the disciplinary mechanism of irregularities

The associations at all levels shall set up disciplinary committees, and disciplinary committees shall be responsible for disciplinary actions against violations committed by the association.

For the problems found in the practice quality inspection and special investigation, the disciplinary committee fully listened to the statements and opinions of the inspection teams and accountants, and formed disciplinary decisions on the basis of adopting reasonable defense opinions.

According to the disciplinary committee, the associations at all levels decided to strictly punish the firms and certified public accountants who had serious problems.

At the same time, in order to guarantee the rights of the punishing firms to appeal, the commissions at all levels set up the appeals committee, deliberated on the disciplinary matters and made an arbitration decision.

During the "12th Five-Year" period, the CPA carried out disciplinary sanctions against 532 firms and 1330 registered accountants who had serious practice quality problems. Among them, the CPA implemented disciplinary measures against 2 securities firms and 30 registered accountants.

(two) public disclosure of inspection and disciplinary information

Checking and punishing information disclosure is an effective means to strengthen the supervision of the industry.

The CPA pays annual notice to the society about the number of offices, inspection objects, inspection contents, inspection priorities, inspection results and so on. The inspection contents and examination results will be detailed after the completion of the inspection and subsequent processing. At the same time, the reasons for public disciplinary punishment should be disclosed, and the pparency, credibility and deterrence of the industry inspection should be enhanced.

(three) strengthening education assistance

The purpose of inspection is to help, educate, supervise and promote.

At the on-site inspection stage, the inspection teams thoroughly understood the outstanding problems encountered in the development of the firm, and fully communicated and exchanged the partners' governance mechanism, the quality control management of the firms, the cultural construction of the firms, and the personnel training.

After the inspection and processing work is finished, the company will issue a rectification notice or an improvement proposal to the company's quality control system and the problems existing in its business implementation, follow up the rectification of the firm, and supervise its rectification.

For firms with serious problems or disciplinary actions, through reviewing visits, seminars, classified training, interviews and communication, we will understand the rectification and improvement of the firms and urge them to help them find out the problems and correct them.

Since 2013, the CPA and the accounting department of the SFC jointly organized the annual audit training course for securities qualification offices annually, training the chief partners of the firm, the partners in charge of quality control, and the inspectors at all levels, focusing on explaining the common problems and major problems found in the daily inspection conducted by the CSRC, as well as the outstanding problems existing in the quality control system of the CSRC, prompting the firm to improve in time, and giving warning in advance to the major risk areas audited in the annual report.

In order to play a supporting role in the practice of the practice quality of the firm, the data accumulated in the practice of the quality inspection of the securities qualification office are collated and refined, and the audit cases are compiled, which are recommended for CPAs as teaching materials for continuing education.

In addition, while doing routine supervision work, we should attach great importance to the supervision of major cases in capital markets, set up a special investigation system, promptly accept complaints and reports to the firms and certified public accountants, pay attention to the hot spot of the capital market, keep track of the public information of the high-risk listed companies, collect, collate and analyze the reports of listed companies and related cases, and timely start the special inspection mechanism to achieve good results.

Over the past 5 years, the China Association for the record has received 67 complaints about the quality of practice.

For the cases of suspected financial fraud, such as green earth, Shengjing Shan River, purple Xin Pharmaceutical, new land, and Quan Quan holdings, the CPA interviewed the relevant firms and certified public accountants at the first time, carried out special inspections on the basis of coordinating other regulatory departments, implemented disciplinary measures against relevant responsible persons, responded promptly to media queries, and effectively maintained the good image of the public interest and the practice of good faith in the industry.

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