“
As the "gatekeeper" of the capital market, the independence and impartiality of CPAs can be said to directly affect the credibility of the market order and investor confidence.
”
Text丨 Chen Bai
The field of certified public accountants has ushered in a series of blockbuster news in recent times.
On September 18, the Chinese Institute of Certified Public Accountants (hereinafter referred to as the "China Institute of Certified Public Accountants") issued the "Chinese Certified Public Accountants Independence Standard No. 1 - Requirements for Independence in the Audit and Review of Financial Statements (Consultation Paper)" (hereinafter referred to as the "Guidelines"), which extracted the independence requirements from the code of ethics to form a special independence standard and solicited public comments on it.
The issuance of the Standards by the China Accounting Association at this time, raising the independence requirements to an unprecedented height, is undoubtedly a positive response to the current independence challenges faced by the audit industry, which means that the mainland accounting industry has clearer standards in terms of independence. This is not only conducive to raising the awareness of independence of accounting firms and practitioners, but also improves the practice level and service quality of the entire industry.
Independence is the lifeblood of the CPA profession and the key to ensuring audit quality and credibility. Since the United States Enron incident many years ago, there has been no shortage of major financial fraud incidents at home and abroad that have attracted global attention in recent years, and in reviewing the major cases in the past, the failure of audit is often the first "anthill" of the dam failure.
Returning to the recent PwC fine, as mentioned in the CSRC's response, PwC is not only a simple audit dereliction of duty and invalidation, but to a certain extent, it has covered up or even connived at Evergrande Real Estate's financial fraud and fraudulent issuance of corporate bonds, which has seriously eroded the legal and integrity foundation, seriously damaged the legitimate rights and interests of investors, and seriously undermined market confidence, and should be severely punished in accordance with the law.
It is precisely for this reason that, beyond the influence of the industry itself, the real meaning of the issuance of the Guidelines after PwC's punishment is not only the basic requirement for the professional ethics of auditors, but also the reaffirmation of the regulatory goal of maintaining the order of the capital market. In the final analysis, the underlying logic of strengthening the independence of auditing is to deter and crack down on financial fraud from the source and maintain the normal trading order of the capital market.
The essence of auditing is to provide truthful and reliable financial information to help investors and other stakeholders make sound decisions. When auditors maintain a high degree of independence, they are able to impartially assess the financial status of enterprises without being affected by external pressures and internal conflicts of interest, so as to effectively curb the behavior of enterprises to deceive investors through false financial reports, so as to ensure the transparency and fairness of the capital market and safeguard the legitimate rights and interests of all participants.
As the "gatekeeper" of the capital market, the independence and impartiality of CPAs can be said to directly affect the credibility of the market order and investor confidence. After the fine issued to PwC, further emphasizing audit independence from the perspective of industry norms will also help rebuild the image of the audit industry, enhance public trust in audit results, and attract more investors to participate in market transactions and promote the prosperity and development of the capital market.
Editor|Shen Bin
Typesetting|Gan Qiongfang
The Paper Commentary's exclusive manuscript shall not be reproduced without authorization