Big 4 auditors told to go local
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E-mail Shanghai Daily, May 11, 2012
China has stipulated that the Big Four accounting firms should have Chinese citizens lead their business sectors and to reduce the number of foreigners without a local auditing license.
The new guidelines, released by the Ministry of Finance, seek to implement a previous agreement that Sino-foreign joint venture accounting firms should be localized after they have operated on the Chinese mainland market for 20 years.
The Big Four - Deloitte Touche Tohmatsu, PricewaterhouseCoopers, Ernst & Young and KPMG - which entered the mainland in 1992 are the only firms to be affected by the guidelines that became effective from yesterday.
The guidelines stipulated that by August the firms should cut the number of partners with overseas licenses to 40 percent of a firm's total, down from around 50 percent now. By the end of 2017, the number must not exceed 20 percent.
Chinese citizens should be leading partners in the firms after a three-year transitional period from now, the guidelines said.
The Big Four said they support the decision and will focus on developing local talents.
The guidelines come at a time when the Big Four have seen their combined market share fall from 85 percent in 2006 to 70 percent recently.
