How China Has Built an Accounting and Auditing Profession with Potential Global Impact

Abstract

While the auditing profession in the USA and UK has developed ‘from the bottom up’ over more than a century and a half, the Chinese profession has effectively been created ‘from the top down’ in just over 20 years. Based mainly on information obtained from interviews we have conducted in mainland China, in Hong Kong and in London—complementing published histories—we explore the major stages in this achievement and how far the growing reputation of China’s audit firms may now be expected to give them a global ranking, in the context of the continuing rapid growth of China’s economy and its stock markets, and the overseas expansion of its manufacturing and increasingly service-oriented base. We thereby contribute a range of experts’ views on the successes of the Chinese professional project and the challenges it faces for the future, as a complement to the literature on ‘Anglo-American’ international professional service firms.

Keywords: Chinese auditing profession, Chinese audit regulation, International professional services firms (IPSF)

JEL Classification: M41, M42, M48, N7, O16