Niche accounting qualification adds up in China
The Association of Chartered Certified Accountants (ACCA), one of the world's largest global professional accountancy bodies, recently joined with the University of Cambridge ESOL (English for Speakers of Other Languages) Examinations in launching a new financial English exam the Cambridge ICFE (International Certificate in Financial English) in more than 20 countries and areas including China. Allen Blewitt, chief executive officer of the ACCA, spoke to China Daily reporter Zhang Yu about the exam and the growth of accountancy in China.
Q: Since Chinese CPA firms have very small market shares compared to the international Big Four and mostly serve domestic clients, is there a conflict between the needs of domestic CPA firms and the ACCA's ICFE?
A: I don't think there is a conflict because the Ministry of Finance has already started the process of encouraging the small CPA firms to grow and to go international. So they have the government incentive. But in addition, many of them are setting up networks with overseas accounting firms to bring in clients from outside of China who want to trade and do business in China and also Chinese companies who want to work and trade outside.
The second thing is we should look at the history of the accounting profession in the West. If you go back 30 or 40 years, we did not have the Big Four. Twenty years ago, we had the Big Eight. That was because of a process of consolidation and small firms merged to create larger and larger firms. Maybe it will be, we will see in the next 10 years in China, consolidation of the small CPA firms to get the critical mass so they can compete internationally. I think that should be a trend we should look out for.
The point I made about the Chinese CPA firms forming networks with firms outside of China is not just theoretical. We know already many Chinese CPA firms that have established such linkages and we now have firms in the United Kingdom who are looking for partners among the small CPA firms in China.
Q: When did the ACCA enter China's market and how has its recent development been?
A: We came to China's market in 1988 and next year, 2008, will be the 20th anniversary of the ACCA coming to China. Nineteen years ago, ACCA was the first international accounting body to come into China. We were years ahead of anyone else. The reason we came here is that we recognized that as China is embracing Western capitalism it will need many more internationally qualified professional accountants.
We have developed very strongly and saw a 20 percent increase on student enrollments last year in China. We are very happy with our development in China because the people who choose ACCA: 1) want an international career; 2) have good English skills; 3) are technically very strong. So it's not a mass market qualification. It's a bit of a niche qualification in China.
Q: The ACCA serves two types of customers: one is students and the other is members. You arrange tests for students. But what kind of services do you offer for members?
A: In all major cities in China, we regularly run activities where they can meet their colleagues, network and also get technical learning. We also have a very powerful website. Because we are a global organization, the most cost-effective way for those people is through the website. It has 30,000 or 40,000 pages on the website of technical information advice people can research and there is a lot of information support on this site.
Last year, 97.8 percent of members renewed their membership. So there is a very high percentage of members who are loyal enough to continue their membership. I think that says we are providing the services our members want.
Q: How can the ACCA differentiate itself from its competitors in China like the CICPA (Chinese Institute of Certified Public Accountants)?
A: Firstly, we are more genuinely global because we have an identical syllabus worldwide and we have offices in 80 countries and have members in 160 countries. Ambitious young Chinese want to join the professional body that will enable them to go to Singapore, Hong Kong, Canada, Australia, the United Kingdom, Africa wherever their career takes them. We can offer that.
Secondly, we are an organization with a very high reputation. We invest a lot of time and money to make sure that reputation stays high.
Thirdly, we have very talented staff on the ground. Once we commit an operation, we recruit talented local staff, not expatriates, but local staff who understand the language and culture, which is part of our differentiator.
Q: What is the ACCA's investment plan in China? Is the Chinese mainland currently the largest market in the Asia-Pacific for the ACCA?
A: It is a long-term investment. Probably in the early years, we invested far more than we got in return. Now as the size is growing, we get returns on the investment.
Part of the investment plan is we will need to have an additional office. We now have three offices on the Chinese mainland. We will have the fourth office probably in the west or northwest because that's where the government is encouraging us to go.
The Chinese mainland is not the ACCA's largest market in the Asia-Pacific area. Hong Kong is still the largest market, but the Chinese mainland has more potential to grow. It's an emerging market whereas Hong Kong is a stable and mature market.
(China Daily 04/10/2007 page15)
