China Construction Bank reforms accounting and auditing system

The China Construction Bank plans to reform its outdated accounting and auditing system to deal with the increasing number of financial risks. Wang Qishan, the bank's president, said that the accounting and auditing system still in use is not capable of meeting the bank's growing needs for commercialisation. "In the absence of an advanced accounting or examination system, commercial banks will be unable to expand their business," Wang noted in a speech.
All the main state-owned banks in China began to turn themselves into commercial banks several years ago to adapt to tough market competition, but an effective accounting and auditing system is yet to be introduced, and it is what commercial banks need most, Wang noted. He said that his bank will gradually separate these functions of accountants from those of auditors. Previously accounting and auditing were combined as one, and the bank will restrict the power of presidents of its 45 branches at the provincial level to extend loans. The bankwill also put a spending ceiling on each branch bank at the county level, and keep a close watch on the performance of each branch every year, he said.