Authorities in China on Thursday began implementing a new program that
orders the "Big Four" global auditing companies dominating the Chinese
market to practise as local firms after their joint venture agreements
expired.
Authorities in China on Thursday began implementing a
new program that orders the "Big Four" global auditing companies
dominating the Chinese market to practise as local firms after their
joint venture agreements expired.
The new rule applies to KPMG,
Deloitte Touche Tohmatsu, Ernst & Young and PricewaterhouseCoopers
(PWC), noted a joint statement from the Ministry of Finance, the
Ministry of Commerce, the State Administration of Industry and Commerce,
the State Administration of Foreign Exchange and the China Securities
Regulatory Commission.
According to the new regulation, the
auditing giants should form special group partnerships with limited
liability to continue their business in China when their joint venture
terms end.
The new localized accounting offices should each have
at least 25 qualified partners, 100 Chinese Certified Public Accountants
and a registration capital of 10 millon yuan (about 1.6 million U.S.
dollars).
In most countries, the Big Four are owned by local
partners, operating more like a franchise than a typical multinational
corporation.
Deloitte, KPMG and Ernst & Young will see their
20-year joint venture arrangements expire later this year, while PWC's
joint venture agreement will come to an end in 2017.