Ever since China opened up to the world in 1980's, the Shanghai Municipal Government, led by the Communist Party of China and the State Council, makes great effort to build the city into an international economic, financial, trade and shipping center. With the cooperation and hardwork of Shanghai people, the city is progressing to its goal as a global metropolitan. The new team of leaders of the Shanghai government took office in February 2003. "The power of the government is entrusted by the people; the interest of people is above all," as Shanghai Mayor Han Zheng promise in his inaugural. Guided by the Shanghai Party Committee, the city's new leadership vows to strictly perform its official duties; to make significant progress in self-improvement, and to intensify the shift of its role from administrative to public service. The Shanghai government will build itself into a service government that would share with the people all their happiness and troubles; a solid responsible government that is efficient, honest and diligent; a law-abiding government that respects legal system and rules strictly and impartially.

Shanghai will Strengthen the Audit and Punishment on "False Capital Verification" Committed by Accounting Firms, etc.

10/29/2004

Recently, an accounting firm received a penalty ticket from supervisory authority for its issuance of a false capital verification report to an enterprise, which connived at the enterprise's withdrawal of the prepaid capital after obtaining the capital verification report. The penalty was "confiscating all illegal income, 157,971 yuan and fining the sum 5 times of the illegal income, 789,855 yuan." Shanghai Administration of Industry and Commerce stressed that it might work together with related authorities to strengthen the audit and punishment on the false capital verifications committed by accounting firms and assets assessment firms, to eliminate the generation of "cheating" companies from the root.
Capital verification means the action where a registered accountant audits and verifies the trueness and legality of the registered capital of an organization. The capital verification is critical to the identification of corporate capacity, compensation ability for civil issues and protection of debtees' interests and an important part to build the credit economy. However, some accounting firms only focus on more economic benefit and intentionally cheat or ignore the scope and basis of capital verification and thus lead to false reports with the results discrepant to the truth. Therefore, Shanghai government will revise relevant regulation and related authorities will take joint effort to apply regulated management measures to eliminate the flaw in capital verification.

The Shanghai government 2006