China: Implemented Administrative Measures for the selection and engagement of accounting firms by state-owned enterprises and listed companies

On 4 May 2023, the Chinese Ministry of Finance issued the Administrative Measures for the selection and engagement of accounting firms by state-owned enterprises and listed companies. The Measures define listed companies as any company with shares offered and traded domestically. In particular, Article 7 of the Administrative Measures requires an increase in security checks before hiring an accounting firm, such as information security management capabilities and their general risk-taking model. Furthermore, Article 18 states that state-owned enterprises, listed companies, and accounting firms must increase awareness of information security and recognise their responsibility in ensuring high security and confidentiality. A review of the accounting firm's security capabilities should be extensively reviewed to clarify the responsibilities and requirements of security protection before entering into a contract with them. The Administrative Measures entered into force on the date of their publication.