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New Requirements for Accountants in Chinese Taiwan: A Closer Look

Chinese Taiwan has introduced new requirements for accountants in the country to bring its accounting standards in line with international best practices. As of May 2024, several key standards have been adopted or partially adopted, paving the way for a more harmonized and transparent financial landscape.

CPA Exam: The First Step

For individuals seeking to enter the accounting profession in Chinese Taiwan, passing the Certified Public Accountant (CPA) exam is now a requirement. Administered by the Ministry of Examination, the CPA exam is taken following the completion of an applicable university degree. As of May 2024, the International Education Standard (IES) has been adopted.

Auditing Standards: TWSA and ISA

The Auditing Standards Committee of the Accounting Research and Development Foundation (ARDF) is responsible for establishing auditing standards in Chinese Taiwan. The Republic of China Generally Accepted Auditing Standards (ROC GAAS), reclassified and recoded as TWSA, TWSRE, and TWSQC1 since December 15, 2022, have been adopted. The ARDF has also converged with the 2021 International Standards on Auditing (ISA).

Code of Ethics: A Partial Adoption

The Federation of CPA Associations of Chinese Taiwan (FCPAACT) is responsible for establishing ethical requirements for Certified Public Accountants, with approval by the Financial Supervisory Commission (FSC). While most of FCPAACT’s Code of Ethics was revised in 2022 to refer to the 2018 International Ethical Standards Board for Accountants (IESBA) Code, there are no plans to adopt the 2022 IESBA Code at this time.

International Public Sector Accounting Standards: Partial Adoption

The Directorate General of Budget, Accounting & Statistics (BAS) of the Executive Yuan is responsible for adopting accounting standards for the public sector. The current procedures and standards were updated in 2019 with the publication of the revised Governmental Accounting Concepts Statements and Governmental Accounting Pronouncement. While the pronouncement refers to International Public Sector Accounting Standards (IPSAS), it has not been fully adopted.

Investigation and Discipline: A Partially Adopted System

The Federation of CPA Associations of Chinese Taiwan (FCPAACT) is responsible for establishing an investigative and disciplinary system for Certified Public Accountants (CPAs). Chapters 6 and 7 of the Certified Public Accountants Act set out the disciplinary process and sanctions to be administered against CPAs who have been found guilty of misconduct. While the FCPAACT has identified gaps in its I&D system, it is working to address these issues.

International Financial Reporting Standards: Partial Adoption

The Financial Supervisory Commission (FSC) and the Accounting Research and Development Foundation (ARDF) are responsible for establishing applicable accounting standards in Chinese Taiwan. Public companies are required to prepare financial statements in accordance with International Financial Reporting Standards (IFRS) as endorsed by the FSC, while non-public companies can either follow IFRS or Enterprise Accounting Standards (EAS). The ARDF is responsible for reviewing and translating all accounting standards issued by the International Accounting Standards Board (IASB).

As Chinese Taiwan continues to align its accounting standards with international best practices, accountants in the country can expect a more harmonized and transparent financial landscape.