Core Viewpoint - The expansion of the H-share audit "gold medal list" marks a significant step in the dual opening of the capital market, with the Ministry of Finance and the China Securities Regulatory Commission (CSRC) announcing the addition of two more accounting firms to the existing list of ten, emphasizing quality and selective criteria for inclusion [1][2][5] Summary by Sections Expansion of the H-share Audit List - The Ministry of Finance and CSRC issued a notice to supplement the list of accounting firms qualified for H-share audits, adding two firms to the existing ten [1] - The expansion is not merely quantitative but includes strict criteria such as a minimum annual revenue of 1.5 billion yuan and at least 800 registered accountants [2][4] Quality and Selection Criteria - The core principle for selection is "quality first, selective recruitment," with clear and stringent basic requirements for firms wishing to be included [2][3] - Key requirements include: 1. Presence of a member firm in Hong Kong or affiliation with an international accounting network [2] 2. Minimum annual revenue of 1.5 billion yuan, with at least 1 billion yuan from audit services and 250 million yuan from securities services, or at least 100 listed company audit clients [2] 3. At least 800 registered accountants [2] 4. Robust internal governance and quality management systems [2] Dynamic Management Mechanism - A dynamic exit mechanism has been established to remove firms that no longer meet the standards, enhancing the quality of audit services available to mainland enterprises listing in Hong Kong [2][6] - The review and recommendation process will be overseen by a committee formed by the Ministry of Finance and CSRC, ensuring transparency and fairness [3] Historical Context and Industry Impact - The H-share audit business list mechanism began in December 2010 with 12 firms, effectively reducing costs for mainland enterprises listing in Hong Kong and promoting capital market connectivity [3][4] - The addition of two firms is seen as a crucial optimization of the audit mechanism, reflecting changes in the industry landscape and market demands [4] Regulatory Cooperation and Oversight - The expansion reflects deepening cooperation between mainland and Hong Kong accounting regulators, aligning with national strategies and enhancing the quality of audit services [5][7] - A comprehensive regulatory framework has been established, including dynamic assessments, regular quality checks, and strict reporting requirements for H-share accounting firms [6][7]