CERTIFIED PUBLIC ACCOUNTANTS

(Adopted at the Fourth Meeting of the Standing Committee of the Eighth National People’s Congress on October 31, 1993, promulgated
by Order No. 13 of the President of the People’s Republic of China on October 31, 1993, and effective as of January 1, 1994)

CHAPTER II EXAMINATION AND REGISTRATION

CHAPTER IV PUBLIC ACCOUNTING FIRM

CHAPTER VI LEGAL LIABILITY

   Article 1 This Law is formulated in order to bring into play certified public accountants’ role of attestation and service in social economic
activities, strengthen administration of affairs of certified public accountants, protect public interests and the
lawful rights and interests of investors, and promote the healthy development of the socialist market economy.

   Article 2 A certified public accountant is a professional who has obtained the certificate of certified public accountant according
to law and is commissioned to offer auditing, accounting consultancy and other accounting services.

   Article 3 A public accounting firm is an organization which is established according to law and undertakes to provide professional
services of certified public accountants.

A certified public accountant who provides services shall join a public accounting firm.

   Article 4 The institute of certified public accountants is a public organization composed of certified public accountants. The
Chinese Institute of Certified Public Accountants is the national organization of certified public accountants and institutes
of certified public accountants in provinces, autonomous regions and municipalities directly under the Central Government
are local organizations of certified public accountants.

   Article 5 The financial department under the State Council and financial departments of the people’s governments of provinces, autonomous
regions and municipalities directly under the Central Government shall supervise and guide the activities of certified
public accountants, public accounting firms and institutes of certified public accountants according to law.

   Article 6 Certified public accountants and public accounting firms in performance of services must abide by the law and administrative
rules and regulations.

Certified public accountants and public accounting firms shall carry out their business independently and impartially according
to law and shall be protected by law.

CHAPTER II EXAMINATION AND REGISTRATION

   Article 7 The State shall adopt a unified national examination system for certified public accountants. The measures for the unified national
examination shall be formulated by the financial department under the State Council and such examination shall be organized
and conducted by the Chinese Institute of Certified Public Accountants.

   Article 8 Chinese citizens who have graduated from colleges or universities or who have earned the professional post_title of accountant
or an intermediate or higher professional post_title in a relevant field of study may apply for attendance at a unified national
examination for certified public accountants. Those who have earned the professional post_title of accountant or senior professional
post_titles in a relevant field of study may be exempted from examination in certain subjects.

   Article 9 Whoever has passed the unified national examination for certified public accountants and has engaged in auditing business
for more than two years may apply to the institute of certified public accountants of the province, autonomous region
or municipality directly under the Central Government for registration.

Except the situations specified in Article 10 of this Law, the institute of certified public accountants that has received the application
shall permit the applicant to register.

   Article 10 If the applicant is involved in any of the following circumstances, the institute of certified public accountants that
has received the application shall not permit the applicant to register:

(1) if the applicant does not have the full capacity for civil conduct;

(2) if the applicant was punished for a crime and the period between the date of completing the criminal punishment and the date
of application for registration is less than five years;

(3) if the applicant was subjected to an administrative sanction, or removed from office or a more serious sanction, due to
grave mistakes in financial, accounting, auditing, enterprise management or other economic activities, and the period between
the date of the decision for such punishment or sanction and the date of application for registration is less than two years;

(4) if the applicant was punished with the revocation of the certificate of certified public accountant, and the period between
the date of the decision for such punishment and the date of application for registration is less than five years;
or

(5) other circumstances under which registration shall not be approved as stipulated by the financial department of the State
Council.

   Article 11 The institute of certified public accountants shall submit the namelist of applicants whose applications are approved to
the financial department of the State Council for the record. If the financial department of the State Council
finds any registration approved by an institute of certified public accountants to be inconsistent with the provisions
of this Law, it shall notify the relevant institute of certified public accountants to cancel the registration.

If an institute of certified public accountants decides not to approve the registration of an applicant in accordance with Article
10 of this Law, it shall notify the applicant in writing within 15 days after the decision is made. If the applicant disagrees
with the decision, he or she may, within 15 days after receiving the notification, apply to the financial department of the
State Council or the financial department of the people’s government of the province, autonomous region or municipality
directly under the Central Government for reconsideration.

   Article 12 The applicants who are permitted to register shall be granted by the institute of certified public accountants an unified certificate
for certified public accountants issued by the financial department of the State Council.

   Article 13 If anyone who has acquired the certificate of a certified public accountant is involved in any of the following circumstances
besides the one stipulated in the first paragraph of Article 11 of this Law, the institute of certified public accountants
that approved the registration shall cancel the registration and revoke the certificate for certified public accountant:

(1) having completely lost the capacity for civil conduct;

(2) being under punishment for a crime;

(3) being under an administrative sanction, or removed from office, or under a more serious sanction due to grave mistakes
in financial, accounting, auditing, enterprise management or other economic activities; or

(4) having stopped, of his or her own accord, serving as a certified public accountant for one year or more.

If the person concerned disagrees with the cancellation of registration, he or she may, within 15 days from the date of
receiving the notification about the cancellation of registration or the revocation of the certificate for certified
public accountant, apply for reconsideration to the financial department of the State Council or the financial department
of the people’s government of the province, autonomous region or municipality directly under the Central Government.

Persons whose registration has been cancelled in accordance with the provisions of the first paragraph may apply for registration
anew, but the provisions of Article 9 and Article 10 of this Law must be complied with.

CHAPTER III BUSINESS SCOPE AND RULES

   Article 14 Certified public accountants shall undertake the following audit services:

(1) examining the accounting statements of enterprises and producing audit reports;

(2) verifying the capital of enterprises and producing capital verification reports;

(3) dealing with audit services in matters of merger, division or liquidation of enterprises and producing the relevant reports;
and

(4) other audit services stipulated by relevant laws and administrative rules and regulations.

The reports produced by certified public accountants engaged in audit services according to law shall be authentic.

   Article 15 Certified public accountants may undertake accounting consultancy and accounting services.

   Article 16 All professional engagements to be undertaken by certified public accountants shall be accepted by the public accounting firm
to which they belong and which shall sign engagement contracts with the clients.

The public accounting firm shall assume civil liabilities for the services provided by its certified public accountants in
accordance with the provisions of the preceding paragraph.

   Article 17 When providing services, certified public accountants may, where necessary, consult the relevant accounting materials, documents
and check the business site and facilities of the client and require that the client provide other necessary assistance.

   Article 18 If there is an interest between a certified public accountant and a client, the certified public accountant shall withdraw; and
the client shall have the right to demand that he or she withdraw.

   Article 19 Certified public accountants shall have the obligation to keep their clients’ business secrets they come to know in carrying
out their business.

   Article 20 In carrying out their audit services, certified public accountants may, under any of the following circumstances, refuse
to produce a report to their clients:

(1) The client indicates that they should provide untruthful or improper verification;

(2) The client intentionally refuses to provide relevant accounting materials and documents; or

(3) Due to other unreasonable requirements from the client, the report to be produced by certified public accountants can not
provide a correct account of the important items of the financial accounting.

   Article 21 The certified public accountants must, in carrying out audit services, produce audit reports in accordance with the audit procedures
set in the professional standards and rules.

When preparing reports in the course of carrying out audit services, certified public accountants may not commit any of the
following acts:

(1) to refrain from pointing out while clearly knowing that the client’s processing of the important items of the financial
accounting contravenes the relevant provisions of the State;

(2) to conceal facts or produce an untruthful report while clearly knowing that the client’s processing of the financial
accounting will directly impair the interests of the users of the report or other interested parties;

(3) to refrain from pointing out while clearly knowing that the client’s processing of the financial accounting may substantially
mislead the users of the report or other interested parties; or

(4) to refrain from pointing out while clearly knowing that the important items of the client’s accounting statements
contain other false information.

Where certified public accountants ought to know the acts of their clients specified above in accordance with the professional
standards and rules, the provisions of the preceding paragraph shall apply.

   Article 22 Certified public accountants shall not commit any of the following acts:

(1) in the course of carrying out audit services, to buy or sell stocks or debentures of the institutions audited or purchase other
property of institutions or individuals audited during the period such acts are prohibited as prescribed by the laws
and administrative rules and regulations;

(2) to ask for or accept remuneration or other forms of payment in cash or in kind in addition to what is agreed upon with the
client in a contract, or seek other unlawful interests by taking advantage of their services;

(3) to undertake commission to dun debts;

(4) to allow others to carry out services in the name of the certified public accountant;

(5) to work concurrently at two or more public accounting firms;

(6) to advertise their qualifications to solicit business; or

(7) other acts in violation of the laws or administrative rules and regulations.

CHAPTER IV PUBLIC ACCOUNTING FIRM

   Article 23 A public accounting firm may be established by certified public accountants in partnership.

The obligations of a public accounting firm in partnership shall be borne by the partners with their own property according
to the proportion of their respective capital contributions or to their agreement. The partners shall bear joint
liabilities as to the obligations of the public accounting firm.

   Article 24 A public accounting firm conforming to the following requirements may be a legal person with limited liabilities:

(1) having a registered capital of no less than 300 000 yuan;

(2) employing a certain number of full-time professionals, among whom there must be at least five certified public accountants;
and

(3) satisfying the business scope and other requirements as stipulated by the financial department of the State Council.

Public accounting firms with limited liabilities shall bear obligations with their total assets.

   Article 25 The establishment of a public accounting firm shall be subjected to the approval of the financial department of the
State Council, or the financial department of the people’s government of the province, autonomous region or municipality
directly under the Central Government.

To apply for establishment of a public accounting firm, the applicant shall submit to the examining and approving authorities
the following documents:

(1) an application;

(2) the name, institutional structure and premises of the public accounting firm;

(3) the articles of association of the public accounting firm, and the agreement of partnership if there is any;

(4) the name list, resumes and relevant certificates of the certified public accountants;

(5) the names, resumes and relevant certificates of the leading persons and partners of the public accounting firm;

(6) the certificate of capital contributions of the public accounting firm with limited liabilities; and

(7) other documents as required by the examining and approving authorities.

   Article 26 The examining and approving authorities shall decide whether to approve or not within 30 days from the date of receiving
the documents of application.

Public accounting firms approved by the financial departments of the people’s governments of provinces, autonomous regions or
municipalities directly under the Central Government shall be filed with the financial department of the State Council for
the record. If the financial department of the State Council finds the approval to be inappropriate, it shall, within
30 days from the date of receiving the report, notify the original examining and approving authorities to review the case.

   Article 27 Establishment of a branch of a public accounting firm shall be subjected to the approval of the financial department of the people’s
government of the province, autonomous region or municipality directly under the Central Government where the branch is to
be located.

   Article 28 Public accounting firms shall pay taxes according to law. Public accounting firms shall set up a professional risk fund
and undertake professional insurance as prescribed by the financial department of the State Council.

   Article 29 When receiving business, public accounting firms shall not be limited by administrative regions or trades, except as otherwise
provided by the laws, administrative rules and regulations.

   Article 30 No unit or individual shall interfere in the services entrusted by the clients to public accounting firms.

   Article 31 The provisions of Articles 18 to 21 of this Law shall be applicable to public accounting firms.

   Article 32 Public accounting firms shall not commit any of the acts listed in Items 1 to 4, Item 6 and Item 7 of Article 22 of this Law.

CHAPTER V INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS

   Article 33 A certified public accountant shall join an institute of certified public accountants.

   Article 34 The Articles of Association of the Chinese Institute of Certified Public Accountants shall be formulated by the national
congress of the members of the Institute and filed with the financial department of the State Council for the record.
The articles of association of the institutes of certified public accountants of provinces, autonomous regions
or municipalities directly under the Central Government shall be formulated by the congresses of the members of the institutes
and filed with the financial departments of the people’s governments of the provinces, autonomous regions or
municipalities directly under the Central Government for the record.

   Article 35 The Chinese Institute of Certified Public Accountants shall draw up professional standards and rules for certified
public accountants according to law and implement them after obtaining approval from the financial department of the State Council.

   Article 36 The institutes of certified public accountants shall support the certified public accountants in conducting their services according
to law, safeguard their legitimate rights and interests and convey their opinions and suggestions to the relevant authorities.

   Article 37 The institutes of certified public accountants shall carry out annual inspection of the qualifications and professional services
of certified public accountants.

   Article 38 The institutes of certified public accountants shall acquire the status of body corporate according to law.

   Article 39 If a public accounting firm violates the provisions of Article 20 or Article 21 of this Law, the financial department of
the people’s government at or above the provincial level shall give a warning to the firm, confiscate its illegal income
and may concurrently impose a fine of not less than one time, but not more than five times the value of the illegal income.
If the circumstances are serious, the financial department of the people’s government at or above the provincial
level may also suspend its business operation or revoke its business licence.

If a certified public accountant violates the provisions of Article 20 or Article 21 of this Law, the financial department
of the people’s government at or above the provincial level shall give a warning to the accountant. If the circumstances
are serious, the financial department of the people’s government at or above the provincial level may suspend his services
or revoke his certificate of the certified public accountant.

A public accounting firm or a certified public accountant, that, in violation of the provisions of Article 20 or Article
21 of this Law, intentionally produces untruthful audit reports or capital verification reports shall, if the case constitutes
a crime, be investigated for criminal responsibilities according to law.

   Article 40 If a unit undertakes the services defined for certified public accountants under Article 14 of this Law without prior approval,
the financial department of the people’s government at or above the provincial level shall order the unit to stop its
illegal activities, confiscate its illegal income and may concurrently impose a fine of not less than one time, but not
more than five times the value of the illegal income.

   Article 41 If the party concerned disagrees with the decision on administrative sanctions, it may, within 15 days from the date
of receiving the notification of the decision on sanctions, apply for reconsideration to the organ at the next higher
level than the organ that made the decision on sanction. The party concerned may also, within 15 days from the date of receiving
the notification of the decision on sanction, directly being a suit before a people’s court.

The organ giving reconsideration shall make a decision within 60 days from the date of receiving the application for reconsideration.
If the party concerned disagrees with the decision made after reconsideration, it may bring a suit before a people’s court
within 15 days from the date of receiving the decision. If the organ giving the reconsideration fails to make a decision within
the time limit, the party concerned may bring a suit before a people’s court within 15 days from the expiration of the time
limit for reconsideration.

If the party concerned within the time limit has neither applied for reconsideration nor brought a suit before a people’s court,
nor complied with the decision on sanction, the organ making the decision may apply to the people’s court for compulsory execution.

   Article 42 If a public accounting firm has in violation of the provisions of this Law caused losses to its client or other interested
parties, it shall bear the liability for compensation according to law.

CHAPTER VII SUPPLEMENTARY PROVISIONS

   Article 43 A certified public auditor working in an audit firm, who has been recognized as qualified for a certified public accountant,
may carry out the services provided by this Law. Measures for recognition of qualifications, and for supervision, guidance and
administration of such auditors shall be formulated separately by the State Council.

   Article 44 As to foreigners who apply for participation in the unified national examination for Chinese certified public accountants and
for registration as certified public accountants, the matter shall be dealt with on a reciprocal basis. Foreign public accounting
firms that wish to establish a permanent representative office within the territory of China must apply to the financial
department of the State Council for approval. A cooperative public accounting firm to be jointly sponsored by foreign and
Chinese public accounting firms shall be subject to the examination and consent of the department under the State Council
in charge of foreign economic relations and trade or a department authorized by the State Council and of a people’s
government at the provincial level, before the matter is reported to the financial department of the State Council
for approval.

Apart from what is stipulated in the preceding paragraph, if a foreign public accounting firm wishes to conduct relevant business
within the territory of China on a temporary basis, it must apply to the financial department of the people’s government
of the relevant province, autonomous region or municipality directly under the Central Government for approval.

   Article 45 The State Council may formulate regulations for implementation in accordance with this Law.

   Article 46 This Law shall enter into force as of January 1, 1994. The Regulations of the People’s Republic of China on Chinese Certified
Public Accountants promulgated by the State Council on July 3, 1986