China's Ministry of Finance has issued its 15th Five Year Plan for Accounting Reform and Development, setting priorities for stronger financial fraud enforcement, updated reporting and auditing standards, and greater use of digital technology. The plan covers companies, public bodies and accounting service providers, combining closer supervision with expanded sustainability disclosure standards and changes to accounting firm governance.
Enforcement priorities include investigating fabricated transactions, inflated profits and third parties that facilitate financial fraud. Auditing standards will be revised to improve auditors' ability to identify and respond to systematic fraud and collusion. Supervision of accounting firms will target missing audit procedures, fabricated evidence and false reports, alongside breaches of independence and serious quality management deficiencies. The plan also calls for stronger coordination of administrative, civil and criminal accountability. Accounting firm reforms include strengthening oversight of firms auditing listed companies and promoting partner appointment, evaluation, remuneration and exit mechanisms that prioritize quality.
Standards development will include climate disclosure application guidance for key industries, research on biodiversity and small business sustainability disclosure standards, and further sustainability assurance standards. Published sustainability standards will undergo pilot implementation, with companies' disclosure capabilities developed in stages. Corporate accounting standards will continue to converge with International Financial Reporting Standards, while proposed government accounting work includes revenue recognition and revisions to social insurance and housing provident fund accounting rules. Digital priorities include wider use of standardized electronic accounting documents, automated processing from receipt through archiving, and greater participation in digital bank confirmation platforms. Artificial intelligence and data analytics will support accounting, auditing and regulatory monitoring, alongside stronger network and data security management.