BEIJING, June 3 -- More Chinese financial officials and accountants will participate in exchange programmes with the International Federation of Accountants (IFAC) to speed up the country's convergence with international accounting standards, a top IFAC official said.

    The exchanges will facilitate faster change within China's accounting businesses and will eventually benefit the global economy, according to Graham Ward, IFAC president.

    The federation, the world's biggest organization of accountants with members from 120 countries and regions, finished a two-day board meeting in Beijing on Friday.

    A Chinese finance ministry official has already been working with the IFAC for a year, while Chen Yugui, secretary- general of the Chinese Institute of Certified Public Accountants (CICPA), the domestic industry association, became an IFAC board member at the end of 2003.

    But "that is just the beginning," said Ward in an interview with China Daily.

    Both Ward and Chen said there would be more exchanges, either with officials or accountants, in similar formats to help China catch up with international standards and facilitate relevant reforms, which is becoming increasingly important as the Chinese economy booms and opens up further.

    "We've seen more Chinese companies looking to raise capital in international markets," said Ward. "Investors hope to see financial reports (of these companies) prepared based on international standards."

    China has witnessed a flux of overseas listings by some of its biggest companies in recent years, including China Construction Bank and Bank of China. But most of them choose to use international accounting firms to prepare their reports while Chinese accounting businesses have been unable to compete.

    But the situation may change since the country adopted a new accounting and auditing system in February to converge with international standards.

    That will help strengthen accounting businesses in China, build confidence in their financial reporting model and increase the credibility of their financial information prepared in both domestic and overseas markets, said Ward.

    Meanwhile, China has witnessed a rapid increase in its number of accounting firms in recent years, which reflects the strong growth of China's market economy. And more large-scale accounting businesses are expected to take shape in the coming years.

    However, apart from scale and standards, they are facing other challenges that are shared by the accounting profession worldwide, such as governance, internal control and ethics and integrity, said Ward.

    It requires closer co-operation between accounting professionals worldwide to tackle such challenges, and particularly for China, which still needs more time to implement the new standards.

    China had 5,639 accounting companies by the end of April, with 69,800 certified accountants, according to CICPA statistics. But only more than 100 accounting firms had an annual income exceeding 20 million yuan (US$2.5 million).

    (Source: China Daily)