The Hindu Business Line : What can be more fearsome than the accounting link to Genghis Khan?

One of the top stories about `accountant' is that DNA research has linked a US accountant to the thirteenth century Mongol leader Genghis Khan. His image in most of the world is that of a ruthless bloodthirsty conqueror, notes Wikipedia.

"Zerjal et al (2003) identified a Y-chromosomal lineage present in about 8 per cent of the men in a large region of Asia (about 0.5 per cent of the men in the world)," mentions http://en.wikipedia.org about a possible lineage that originated in Mongolia about 1,000 years ago.

Wonder if the latest gene-connection would put more fear in the minds of everybody when they deal with their accountants. But what can be more fearsome are the strides that China is taking in its accounting profession. For instance, about 13 lakh Chinese people appeared for a two-day national accounting qualification examination last week, as per a Xinhua report dated May 21.

"The national test, the 13th since it was first launched in 1992, has been organised by the Ministry of Finance in cooperation with the Ministry of Personnel." So far, about 32 lakh people have obtained `accounting qualification certificates in various categories,' and the number of people who have signed up for the test adds to nearly 2 crore.

According to Vice Minister of Finance Wang Jun, who has been cited in the report, the exam is `an important source for China to select excellent accounting talents.' Since nearly 40 `corporate accounting standards,' revised in tune with international practices, will become effective in China from January 1, 2007, next year's exam is expected to be in line with the new accounting standards. Closer home, the number of qualified accountants is just above a lakh.

China and the European Union are working together on the professional front. Speaking in Beijing on May 16, Charlie McCreevy, European Commissioner for Internal Market and Financial Affairs, pointed out that accounting and auditing issues have `a very important role in the overall China-EU Financial Dialogue.'

Repositioning accounting

Unmistakable signals, these are, that the accounting profession in the Dragon Land is readying itself for global needs. "Accounting firms reposition for international business," reads the headline of Sun Min's article dated May 30, on www.chinadaily.com.cn. "China's more than 5,000 accounting firms are expected to undergo more market-driven mergers and acquisitions in the coming years in a bid to tackle competition from foreign counterparts." Remember reading anything like that here?

"I think the reshuffle should be driven by market demand instead of administrative orders. It will go slowly, but that will create better works," is a quote of Wang from his speech at a forum organised by the Chinese Institute of Certified Public Accountants (CICPA). The Institute's director Liu Zhongli rues that since `the scale and services of Chinese accounting firms is still limited,' they lose many `top-layer clients.'

Sun mentions CICPA statistics as of April, thus: There were 5,639 accounting companies with 69,800 certified accountants, but only 100-odd accounting firms had an annual income exceeding 20 million yuan (or $2.5 million); in 2005, Chinese accounting firms grossed a revenue of 18.3 billion yuan ($2.3 billion), most of which was from traditional auditing services.

One learns that the Chinese authorities are focusing "more on the internal control and governance of accounting firms to lift the industry's reputation," and that the CICPA is drafting "harsher rules on the punishment of misbehaviour in the industry, such as price wars." Sun's article wraps with this deterring line: "Eighteen domestic accounting firms lost their licences last year due to misbehaviours and 60 were penalised by having to reform and pay fines."

You may visit http://countrystudies.us to know more about China and the reforms it has been through, such as `The Great Leap Forward, 1958-60' and `The Four Modernisations, 1979-82'. The site has "on-line versions of books previously published in hard copy by the Federal Research Division of the Library of Congress as part of the Country Studies/Area Handbook Series sponsored by the US Department of the Army between 1986 and 1998."

Working train of thought

Avid CAs should visit the home page of the Chinese accountancy body, www.cicpa.org.cn. `Brief Introduction' in the English section informs that the Institute sticks to `the working train of thought' of constructing `professional credibility and integrity.' CICPA says that it "makes great efforts to establish the professional faith of `taking integrity as the basis, stressing on professional ethics, adhering to professional standards and not making false accounts'; creates a professional image of `independent, objective and impartial,' so as to constantly promote the improvement and development of the accounting profession, the assets evaluation profession and the certified public tax agent profession, safeguard the public interests conscientiously, and strive to make due contribution to the accomplishment of the grand objectives of establishing improved socialist market economic system and achieving the overall construction of a well-off society."

Quite a mouthful, that is, but there's more in the `charter,' such as that the mission of the Institute is `serving, supervising, regulating and coordinating.' CICPA has brought out `Guiding Opinions on Reinforcing Cultivation of Professional Talents'; and also, `30 Guiding opinions' on `Training Professional Talents for Promoting Internationalisation and Proficiency of the CPA Profession on All Fronts.'

Talent cultivation

Guideline No. 2 speaks of `cultivation of talents for the CPA profession', scientifically through pre-qualification education. Interestingly, it mentions `on-job academic degree education based on requirements of the CPA competency framework,' `professional talent education and training in an all-round way,' `tight but scientific and strict system for benchmarking and evaluation and the mechanism for constraints and incentives,' `endeavour to cultivate high-level professional talents and accounting firm managers that are competent for international engagements and capable of meeting requirements of internationalisation within next five to ten years,' and most important, `a sound scientific mechanism for cultivation of professional talent reserves.'

The twelfth guideline calls for `particular attention' to `the development of a force of instructors from the practising community that has profound theoretical foundations and rich practical experiences.' The thirteenth notes the need for `development of case teaching materials and textbooks for management of accounting firms.'

Reserve accountants

What is the `reserve' that the Institute wants to develop? "Non-practising CICPA members are an important reserve force for the practising CPAs," says guidline 15. The next guideline is on "new ways of training high-level, world-class professional talents and managerial talents via academic degree education such as MPAcc (Master of Professional Accounting) and EMBA (Executive Master of Business Administration)."

Guideline 20 is progressive. It promises, "Every year, a group of outstanding CPAs and senior managers of accounting firms will be selected for overseas study tours and research so as to enhance their professional competency, managerial ability and skills in international communication."

The clincher on reserve talent is in guideline 21. It informs that over the last decade, "22 colleges and universities have offered the CPA program," and that nearly 8,000 graduates have emerged from the program, enabling China to make "a significant breakthrough in educating professional CPA talents." The CPA program will become "a brand major that is known as a household word and yearned for by tens and thousands of students," declares the CICPA.

Which is why, even if you aren't afraid of Genghis Khan, enough things are happening beyond the Great Wall to keep you sleepless. And, instead of counting the sheep jumping over the fence, you can stay awake monitoring the number crunchers who will soon be inundating the profession from China.

http://AccountSpeak.blogspot.com

D. Murali

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