Administrative Regulations of Shenzhen Special Economic Zone on Certified Public AccountantsⅡ

　　Article 37 The board of directors consist of the following members:

　　（1） Three to five directors appointed by the Municipal Finance Department. Municipal Taxation Department and Municipal Auditing Department;

　　（2） Eleven to thirteen directors elected by certified public accountants.

　　Article 38 The board of directors is the executing body of the membership meeting, and its duties are:

　　（1） To report work to the membership meeting and execute resolution of the meeting;

　　（2） To advance development program of the association and draft of annual working plan;

　　（3） To advance revision scheme for constitution of the association;

　　（4） To make decision on the setting and authorities of internal framework;

　　（5） To examine and approve working scheme of the association, and to supervise on its implementation;

　　（6） To elect chairman and vice-chairman;

　　（7） To approve the registration of certified public accountant and establishment of certified public accountants firm;

　　（8） To punish those certified public accountants and certified public accountants firms who violated laws and regulations;

　　（9） To decide the candidates of the registration committee, punishment committee, and other special committee, and to supervise their work;

　　（10） To draw up measures on administration of risk fund uniformly managed by the association;

　　（11） To examine financial revenue and expenditure of the association, to examine and approve standard for membership dues and measures to collect it;

　　（12） Other proceedings stipulated by the association constitution. The secretariat, which established under the board of directors, takes charge of daily work of the association.

　　Article 39 The registration committee, which established under the Municipal Certified Public Accountants Association, is in charge of examination of the establishment of certified public accountants and the registration of certified public accountants.

　　The punishment committee, which established under the Municipal Certified Public Accountants Association, brings forward advice for the punishment of those certified public accountants and certified public accountants firms who violated laws and regulations.

　　The registration committee and the punishment committee shall be responsible for and make work report to the board of directors.

　　Article 40 When examine operation of certified public accountants and certified public accountants firms, the Municipal Certified Public Accountants Association may look up and ask for working paper and other documents of certified public accountants.

　　The Municipal Certified Public Accountants Association and its staffs shall keep business secrets of party examined.

　　Except for the examination of daily operation conducted by the Municipal Certified Public Accountants Association, there shall be more than two staffs to conduct investigation and take evidence with their perfect instrument produced.

　　Certified public accountants, certified public accountants firms, related unit and individual examined, shall offer cooperation for the Municipal Certified Public Accountants Association.

　　Article 41 The Municipal Certified Public Accountants Association shall report its resolution and decision proceedings to the Municipal Financial Department.

　　The resolution and decision made by the Municipal Certified Public Accountants Association, which violate laws and regulations, shall be revoked by the Municipal Financial Department.

　　Article 42 The Municipal Certified Public Accountants Association shall be registered in accordance with laws and regulations and acquire the status of body corporate.

　　Chapter V Administration of Operations

　　Article 43 Only after checked and approved by the Municipal Certified Public Accountants Association and obtain practicing license issued by the Municipal Financial Department, can a certified public accountants firm carry out its business.

　　Article 44 When the certified public accountant undertakes and conducts operation, the certified public accountants firm which he belongs to shall uniformly accept and enter into the commission contract with the consignor.

　　The certified public accountants firm shall bear the civil responsibility for the operation undertaken by its certified public accountants in accordance with first paragraph of this Article.

　　Article 45 A certified public accountant shall withdraw in case he has the following interested relationship with the consignor:

　　（1） He had ever hold a post in the consignor and dismissed from it lest than five years;

　　（2） He himself, his spouse or his lineal descent has investment, loan or other economic interested relationship with the consignor;

　　（3） He has the spouse, lineal descent, lineal affinity or collateral consanguinity relationship with the director, manager or other related governor of the consignor;

　　（4） He hold the post of perennial accounting consultant or conduct accountant proceeding on behalf of the consignor;

　　（5） Other proceedings he shall withdraw for reason of keeping independence.

　　Except for operation charge, in case the certified public accountants firm has other economic interested relationship with the consignor, he shall withdraw.

　　Article 46 The certified public accountant shall issue the operation report in accordance with the working procedure specified by guidelines and requirements of the practicing rules when he implements the auditing operation.

　　The certified public accountant shall not commit the following acts when he implements auditing operation and issues auditing report:

　　（1） Not pointing out the contradiction of the financial and accounting disposal on the important issues of the consignor with the relevant provisions of the state knowingly;

　　（2） Knowing that the financial and accounting disposal of the consignor may directly harm the interest of the report user or other party interested, but covering up or makeing untruthful report;

　　（3） Not pointing out that the financial and accounting disposal of the consignor may conduce the significant misleading to the report user or other party concerned knowingly;

　　（4） Not pointing out that there are other untruthful contents on the important issues of the financial and accounting report of the consignor knowingly.

　　If the consignor commits the acts listed in the preceding paragraph that the certified public accountants shall know according to the practicing guideline and rules, the provision of the preceding paragraph shall apply.

　　Article 47 When a certified public accountant conducts an auditing operation, he shall refuse to issue the operation report under any one of the following circumstances:

　　（1） The consignor indicates him to provide untruthful or improper evidence;

　　（2） The consignor does not supply intentionally the accounting information and relevant documents;

　　（3） Due to other unreasonable requests of the consignor, the report to be issued by the certified public accountants cannot make correct description of the important issues of the financial accounting.

　　Article 48 The certified public accountants shall not commit the following acts:

　　（1） Within six months in the process of implementing to fulfilling the auditing operation, he himself, his spouse or his lineal descent trades the stocks and bonds of the unit being audited, or has assets trading, loans, tenancy or other economic interested relationship with the unit being audited;

　　（2） Demanding or accepting money or other valuables not prescribed in the commission contract, or taking advantage of his duty to seek other improper benefits;

　　（3） Allowing others to implement the operation in his name;

　　（4） Implementing the operation at two or more than two certified public accountants firms simultaneously.

　　Article 49 The certified public accountants shall bear the duty of keeping business secrets that he got to during the implementation of the operation, but it is otherwise in case the consignor approved in writing or required to provide by laws and regulations.

　　Article 50 It shall be prohibited that certified public accountants firm pay or pay in disguised form any unit or individual business introduction fees.

　　It shall be prohibited that any unit appoints certified public accountants firm to undertake relevant business for its jurisdiction counterpart.

　　It shall be prohibited that any unit and its staff seek improper profits for themselves by taking advantage of their position to introduce business to certified public accountants firm.

　　Article 51 A certified public accountants firm shall implement accountants system and financial administrative system laid down by finance department.

　　A certified public accountants firm shall uniformly account the revenue and expenditure of its branches. Contracted management shall be prohibited.

　　A certified public accountants firm shall submit accountant report to the Municipal Certified Public Accountants Association on schedule, and accept financial supervision implemented by the association.

　　Article 52 It shall be prohibited that certified public accountant and certified public accountants firm conduct propaganda by publishing, setting and placarding advertisement or in virtue of news media.

　　The public notice of practice, office movement and employment of certified public accountants firm shall be published in accordance with rules laid down by the Municipal Certified Public Accountants Association.

　　Article 53 Certified public accountants firm shall draw risk-fund by five percent from its business revenue.

　　Risk-fund shall be used to compensate damage caused by the certified public accountants firm during its operation.

　　Risk-fund shall be uniformly administrated by the Municipal Certified Public Accountants Association.

　　Risk-fund shall be deposited in special account and used as special fund.

　　The measures on administration of risk-fund shall be drafted by the Municipal Certified Public Accountants Association and submitted to the Municipal Finance Department for approval.

　　Article 54 Those certified public accountants firms with juristic personality shall purchase the professional liability insurance.

　　The minimum amount of insurance shall be stipulated by the Municipal Certified Public Accountants Association.

　　Chapter VI Legal Responsibility

　　Article 55 Certified public accountant, certified public accountants firm or other relevant person shall bear the liability for compensation in case they violate these regulations and cause harm to other relevant persons.

　　Article 56 Anyone who has violated the second paragraph of Article 6 shall be noticed to the public by the Municipal Certified Public Accountants Association and be imposed a fine of more than 5,000 yuan but less than 10,000 yuan by the Municipal Finance Department; His illegal income, if any, shall be confiscated; He shall be prosecuted for criminal responsibility in case he commits a crime.

　　Article 57 Anyone without certificate of certified public accountant undertakes the business stipulated in Article 8 of these regulations, his auditing report shall be invalid and his illegal income shall be confiscated, and he shall be concurrently imposed a fine of more than 2 times but less than 5 times of the illegal gains by the Municipal Finance Department; In case he commits a crime, he shall be prosecuted for criminal responsibility.

　　Article 58 The auditing report issued by anyone who carried over operation in violation of Article 25 shall be invalid. He shall be confiscated of his illegal income and imposed a fine of more than 1 time but less than 2 times of the illegal gains by the Municipal Finance Department.

　　Article 59 Any branches established in violation of Article 26 of these regulations shall be revoked by the Municipal Certified Public Accountants Association; In case of gross violation, it shall be imposed a fine of more than 10,000 yuan but less than 50,000 yuan by the Municipal Finance Department and have its practicing license revoked by the Municipal Certified Public Accountants Association.

　　Article 60 Any certified public accountants firm violated Article 27 of these regulations shall be imposed a fine of more than 10,000 yuan but less than 50,000 yuan by the Municipal Finance Department.

　　Article 61 Auditing report issued in violation of Article 30 and Article 31 of these regulations shall be invalid. The violator shall be confiscated illegal income and be imposed a fine of more than 2 times but less than 5 times of the illegal gains by the Municipal Finance Department.

　　Article 62 Auditing report issued by any certified public accountant firm that undertakes operations in violation Article 43 of these regulations having no license shall be invalid. The violator shall be noticed to the public by the Municipal Certified Public Accountants Association, have its illegal gains confiscated and be imposed a fine of more than 2 times but less than 5 times of the illegal gains by the Municipal Finance Department.

　　Article 63 Any auditing report issued in violation of Article 45 of these regulations shall be invalid and shall be circulated a notice of criticism by the Municipal Certified Public Accountants Association.

　　Article 64 Anyone shall be warned or suspended of the business by the Municipal Certified Public Accountants Association in case he violated Article 46, Article 47 and Article 48 of these regulations; In case of gross violation, he shall be revoked of practicing license and certificate of certified public accountant; Illegal income shall be confiscated by the Municipal Finance Department in case he gains; He shall be prosecuted for criminal responsibility in case he commits a crime.

　　Article 65 Anyone shall be warned by the Municipal Certified Public Accountants Association in case he violated Article 49 of these regulations; In case of gross violation, he shall have his certificate of certified public accountant revoked; In case he commits a crime, he shall be prosecuted for criminal responsibility.

　　Article 66 Anyone shall be imposed a fine of more than 10,000 yuan but less than 50,000 yuan by the Municipal Finance Department, and shall be circulated a notice of criticism by the Municipal Certified Public Accountants Association in case he violated paragraph 1 of Article 50 of these regulations; In case of gross violation, it shall be revoked of his practicing license by the association; In case he commits a crime, he shall be prosecuted for criminal responsibility.

　　Anyone shall be ordered to make corrections and be imposed administrative responsibility in case he violated paragraph 2 of Article 50.

　　Anyone shall be confiscated of his illegal gains and be imposed administrative responsibility in case he violated paragraph 3 of Article 50; In case he commits a crime, he shall be prosecuted for criminal responsibility.

　　Article 67 Anyone shall be imposed a fine of more than 20,000 yuan but less than 50,000 yuan by the Municipal Finance Department in case he violated Article 51 of these regulations; In case of gross violation, he shall be revoked of his practicing license by the Municipal Certified Public Accountants Association and be circulated a notice of criticism.

　　Article 68 Anyone shall be imposed a fine of more than 10,000 yuan but less than 20,000 yuan by the Municipal Finance Department, and shall be circulated a notice of criticism by the Municipal Certified Public Accountants Association in case he violated paragraph 1 of Article 52 of these regulations.

　　Article 69 The staff of the Municipal Certified Public Accountants Association shall be imposed discipline punishment in case he violated these regulations by neglecting his duties, misusing of his authorities, practicing irregularities for personal gains, and taking bribes; In case he commits a crime, he shall be prosecuted for criminal responsibility.

　　Article 70 The official of the Municipal Finance Department shall be imposed administrative responsibility by the Municipal Supervision Department in case he violated these regulations by neglecting his duties, misusing of his authorities, practicing irregularities for personal gains, and taking bribes; In case he commits a crime, he shall be prosecuted for criminal responsibility.

　　Article 71 In case the party concerned disagrees with the punishment decision made by the Municipal Certified Public Accountants Association, he may bring a litigation before the people's court within 15 days after receiving the decision of punishment.

　　In case the party concerned disagrees with the punishment decision made by the Municipal Finance Department, he may apply for reconsideration to Administrative Reconsideration Department of the Municipal Government, or directly bring a litigation before the people's court.

　　In case the party concerned neither applies for the reconsideration of the punishment decision within the time limit, nor files a lawsuit at the people's court, nor implements the punishment decision, the association that makes the punishment decision or the Municipal Finance Department shall apply to the people's court for compulsory enforcement.

　　Chapter VII Supplementary Provisions

　　Article 72 The public certified accountants firms and auditors firms established in the Special Zone before these regulations coming into effect shall be reorganized in accordance with these regulations and the reorganization shall be complete before December 31st, 1996.

　　The specific measures on the reorganization are to be provided by the Municipal government.

　　Article 73 The detailed implementing measures shall be formulated by the Municipal People's Government according to these regulations.

　　Article 74 These regulations shall take effect as of April 1 1995.