Chinese accounting industry embraces digitalisation, widely adopts AI in auditing
More than half (55 per cent) of accounting professionals from Chinese accounting firms report that their companies have developed digitalisation strategies and implementation roadmaps. Furthermore, 83 per cent report their firm is using digital technologies in their auditing processes, according to new joint research released by International Business School Suzhou at Xi’an Jiaotong Liverpool University and CPA Australia.
The newly released “Study on Implementation of Digital Technology across Chinese Accounting Firms” reveals that, in six key audit phases, the number of respondents opting to utilise 'artificial intelligence (AI) technology' is higher than the number who apply other digitaltechnologies.
Most respondents believe that applying digital technologies has improved audit efficiency and accuracy (78%) and strengthened data analysis and mining capabilities (54%).
Dean of International Business Suchool Suzhou at Xi’an Jiaotong Liverpool University Professor Jorg Bley said: "As AI advancements continue to move on a steep upward trajectory, digital transformations are taking place among different sectors and industries. This has created an exciting and yet challenging context for the accounting profession. This report is highly topical as it investigates digital implementation by accounting firms in China.
“We hope that businesses and accounting professionals can benefit from the findings of this report and be well prepared for their career in this digitally transforming and rigorously shifting accounting landscape.”
The research indicates that the role of accounting professionals in auditing is irreplaceable, despite many benefits brought by AI technology and other digital auditing technologies in data processing and analysis.
The research shows that the application of digital technologies in the audit opinion phase is significantly lower than in other five audit phases (client investigation and assessment, risk assessment, control testing, substantive testing, and analytical procedures). Additionally, 52 per cent of respondents believe that the impact of digital technologies on providing audit opinions is limited.
CPA Australia’s East and Central China Committee Member Mr David Wang said, "Industries with substantial data and advanced digital infrastructure, such as finance, manufacturing, retail, and technology, are easier to adopt digital auditing technologies. While in other industries like utilities, farming and fishing, digital technologies are barely used in auditing. When it comes to business size, implementing digital auditing in businesses with fewer than 100 employees is proving to be quite challenging.
“Further, many recently announced international and domestic accounting standards have also emphasised the pivotal role of accounting professionals. These professionals are instrumental in applying intricate regulations to diverse business models, enabling them to conduct audit procedures and provide insightful audit opinions to key stakeholders.”
This report also identified four key challenges for implementing digital auditing technologies in China, being compliance risks, vulnerabilities within technical systems, human errors, and management risks.
In addition, the research also shows that junior accounting staff have comparatively lower understanding than senior management on the concept of digitalisation, the application of digital technologies in auditing, and strategies and implementation roadmaps in their firms.
Mr Wang recommended, “To address these challenges, we recommend that universities, employers, and accounting bodies should increase their collaboration. Through training and education, accounting professionals’ digital capabilities should be enhanced, especially junior staff and young talent.”
Professor Bley said, “This report is a fruitful collaboration between the university students, faculty, CPA Australia, and accounting professionals. It enables us to appreciate the talent needs in the digital economy, particularly the accounting profession. With such an understanding, we can revitalise the ways we nurture and develop the next generation of leaders in the accounting profession.
“We are highly appreciative of this strategic partnership with CPA Australia and accounting professionals. We anticipate further partnerships in times to come.”
International Business School Suzhou at Xi’an Jiaotong Liverpool University and CPA Australia jointly collected 914 responses from accounting professionals with diversified positions across various regions in China through online survey and in-depth face-to-face interviews from May to September 2023 for the research.
About the Department of Accounting of IBSS at Xi’an Jiaotong Liverpool University
The Department of Accounting at IBSS is committed to creating and disseminating accounting related knowledge through teaching, research, and a variety of professional engagements.
We aspire to provide student-centred education by delivering world-class programmes and excellent student experiences. Our programmes are professionally accredited with ACCA – Association of Chartered Certified Accountants, CIMA – Chartered Institute of Management Accountants, CPA Australia, and ICAEW – Institute of Chartered Accountants in England and Wales. Such recognitions demonstrate the international quality of education we provide.
Our faculty strive for research excellence by publishing in top quality high impact journals. We continue to explore a diverse range of issues through research drawing on inter-disciplinary perspectives. In our department, more than 90 percent of our faculty are affiliated with at least one of the professional accounting bodies. The close ties we maintain with the industries and professional bodies create professional engagement opportunities for our graduates which enhances their career development and employability.
About CPA Australia
CPA Australia is one of the largest professional accounting bodies in the world, with more than 173,000 members in over 100 countries and regions, including more than 22,500 members in Greater China. We have offices in Hong Kong, Beijing, Shanghai and Guangzhou. CPA Australia provides thought leadership on local, national, and international issues affecting the accounting profession and public interest. We engage with governments, regulators and industries to advocate policies that stimulate sustainable economic growth and have positive business and public outcomes.
Media contacts
Johanna Xu
CPA Australia Media and PR Manager
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Dr Peng Cheng
Head of Accounting Department of IBSS at Xi’an Jiaotong Liverpool University
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