Core Points - The Ministry of Finance and the China Securities Regulatory Commission (CSRC) have issued a notice to supplement the list of accounting firms qualified to conduct audits for H-share companies, adding two new firms to the existing ten [1][2] - This initiative aims to enhance the quality of audits for H-share companies and support the development of the accounting profession in both mainland China and Hong Kong, aligning with national economic goals [1][2] Summary by Sections Background and Significance - The update of the H-share audit firm list is a response to the evolving accounting industry in mainland China and Hong Kong, with the original list established in December 2010 [1] - Two firms from the original list have been disqualified due to mergers or administrative penalties, necessitating the update [1] Requirements for Inclusion - New firms must meet specific criteria, including completion of securities service business registration, certain revenue thresholds, and a sufficient number of registered accountants [2] - Additional factors for consideration include the firm's internal management quality, technological capabilities, and relevant audit experience in Hong Kong [2] Management and Oversight - A dedicated committee will be established to oversee the inclusion process, ensuring transparency and fairness [3] - The Ministry of Finance and CSRC will implement a dynamic management system for the list, conducting annual evaluations to ensure compliance with the established criteria [5] Ongoing Monitoring - The firms will not have a "lifetime" qualification; continuous assessment will be conducted to maintain high standards [5] - Regular quality checks will be integrated into the oversight process, with a focus on H-share audit projects [5] - Enhanced collaboration with Hong Kong regulators will facilitate information sharing regarding audit practices [5]

Core Viewpoint - The China Securities Regulatory Commission (CSRC) and the Ministry of Finance have issued a notice to supplement the list of accounting firms eligible for auditing H-share companies, aiming to enhance the development of the accounting profession and support the construction of Hong Kong as an international financial center [1][2] Group 1: Principles of the Supplementary Work - The process for adding firms to the H-share auditing list is voluntary and orderly, allowing qualified mainland accounting firms to apply for inclusion [1] - Quality is prioritized in the selection process, with firms needing to meet specific standards for auditing H-share companies, ensuring high professional competence and social recognition [1] - There will be strengthened supervision and information sharing between the Ministry of Finance, CSRC, and Hong Kong authorities regarding H-share accounting firms [1] Group 2: Application Requirements - A review and recommendation committee has been established to evaluate applications from accounting firms wishing to join the H-share auditing list [2] - Firms must have completed the registration for securities services and have a business income of at least 1.5 billion yuan (approximately 15 million) for 2024, with specific income thresholds for auditing and securities services [2] - A minimum of 800 certified public accountants must be employed by the firm, and the firm must have a sound governance structure and effective internal management [2] - Preference will be given to firms with advanced information systems, strong risk management capabilities, high integration management, and relevant auditing experience in Hong Kong [2]