China's Ministry of Finance and the National Financial Regulatory Administration issued a joint notice setting out measures to accelerate the digitalisation of bank confirmations used in audit work, with the aim of improving confirmation efficiency and audit quality. The notice seeks to build a secure, convenient, efficient and cost-effective bank confirmation system by increasing participation in the bank confirmation platform, raising the share of digital confirmations and supporting scaled application scenarios. The measures cover platform build-out, security and standards, and operational requirements for banks and audit firms. Platform builders are tasked with unifying connectivity rules, streamlining workflows and upgrading functions while ensuring safe, continuous and stable operations and maintaining independent and controllable core technologies. The Chinese Institute of Certified Public Accountants will develop and publish information security standards for the platform, and platform builders will arrange third-party assessments and provide results to users to reduce duplicative evaluations; industry associations will develop group standards for formatted validation and digital replies and may promote effective group standards to national standards. Banking institutions are expected to strengthen data governance and automation, streamline enterprise processes, shorten reply times, ensure consistency between digital and paper replies where both are used, and set fee structures that encourage digital adoption, including differential pricing and discount mechanisms; the notice also encourages value-added digital audit services and exploring expansion to other confirmation types such as interbank, securities and valuation confirmations. Finance departments will guide and supervise audit firms’ digital confirmation work via local CPA associations, while financial regulators will guide and supervise banking institutions’ digital reply practices; relevant industry associations are to strengthen self-regulation and promote higher digital usage. The notice takes effect from issuance, and local financial regulatory bureaus are instructed to circulate it to locally incorporated banking institutions.

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