Yang Jiantao, principal partner at Ruihua CPAs

This article was first published in the February 2016 international edition of Accounting and Business magazine.

When Yang Jiantao, a former audit clerk in a pharmacy factory, set up his first accountancy firm in 1994, it employed just eight staff and operated out of a rented office in Hubei. ‘My only fixed asset was a printer for printing financial statements, and our only transportation asset was a motorcycle,’ he recalls.

Yang soon opened more audit firms in other parts of China, and today the product of that expansion, Ruihua CPAs, is one of China’s largest accountancy firms, with 40 branches nationwide and annual revenue of over RMB3bn. In 2014 Yang was named among International Accounting Bulletin’s Global Accountancy Power Top 50.

Headquartered in Beijing, Ruihua has over 10,000 employees, including 2,500 CPAs and 338 partners, and serves around 4,000 clients active in all kinds of industries. Nearly 50 of its major clients are state-owned firms, and over 800 are listed companies.

‘Among all accountancy firms in China, Ruihua serves the largest number of state-owned firms. It is also one of the audit firms serving the largest number of listed firms,’ says Yang. Moreover, he adds, data provider Wind ranked it top among audit firms in China for completed M&A transactions in 2014, with deal volume of RMB172.7bn – 12.53% of the overall market.

Building Ruihua

Yang merged two companies to form Crowe Horwath China as a member » firm of Crowe Horwath International (CHI) in 2009. Crowe Horwath China became an accounting powerhouse in China, winning recognition from President Xi Jinping in 2010. In 2013, Yang took another big step forward to establish Ruihua, merging the firm with RSM China (a member firm of RSM International) to become China’s top local audit firm.

Ruihua now offers a wide range of professional services, including financial audit, stock issuance and public listing, corporate restructuring, capital management, financial advisory, management consultancy and tax advisory.

As principal partner of Ruihua, Yang is responsible for hosting the partners’ meetings, handling management committee-level matters, setting management goals, and making strategic decisions. The company’s vision is to build Ruihua as the ‘leading accounting firm in China’ through talent development, diversified services, better risk controls, computerised data filing, corporate culture, global reach and a well-established brand.

‘Our goal is to have Ruihua diversified in the areas of audit, consulting, appraisal and statutory service; we look forward to taking our internationalisation to new heights, with the implementation of the Belt and Road Initiative and China Enterprises Going Global,’ Yang says.

Four-pronged approach

To put his vision into practice, Yang has adopted a four-pronged approach involving deepened reforms, global reach, talent development, and research.
Top of his agenda in the short term is the deepening of reforms in the company.

Part of the revamp involves redirecting a number of units to achieve corporate governance and enhance performance. The aim is to build a centralised management system that can respond to the changing realities of the industry, the requirements of regulators and the expectations of partners.

The centralised system will oversee a range of areas, including brand, market, finance, human resources, quality control and professional standards. ‘It will facilitate a healthy and sustainable development,’ Yang says.

To achieve global reach, Yang says he will focus on equipping staff with global knowledge, conducting studies of international accounting standards, and seeking closer ties with international networks and member firms. ‘We will increase our cooperation in business, skill and talent cultivation to achieve a win-win situation,’ Yang says.

He plans to cultivate talents at different levels through focused training programmes. ’Only with strong talents can we increase our competitiveness,’ he says. ‘The aim is to cultivate each of our talents as an expert in their area.’

Yang has adopted an innovative approach that involves exchanging staff between Ruihua and its affiliates to cultivate talents. ‘We will invite staff from our overseas affiliates to work in our branches and, in exchange, our staff will work at their places. This greatly helps sharing of expertise,’ he believes. The strategy has the power to speedily enhance the quality of Ruihua’s human capital, he says, creating a talent pool in support of the strategic goals.

In response to changing economic and social developments and the needs of the industry, Ruihua also intends to put extra resources into research, skills and accounting standards. Last but not least, he has strengthened risk control in auditing to further build its brand as a high-quality audit firm.

Yang and his team have achieved a considerable amount. According to the the Chinese Institute of Certified Public Accountants’ 2015 ranking of the Top 100 Public Accountancy Firms in China, Ruihua has been ranked top among local Chinese accountancy firms for three consecutive years, and fourth among all accountancy firms in China, breaking the dominance of Big Four in China.

Yang sees many reasons for Ruihua’s success. He attributes it largely to the strength of China’s economy, which led to rapid growth in local corporates and Chinese audit firms, including Ruihua.

He also gives credit to government departments which have launched policies since 2009 to create a favourable environment for local accountancy firms to expand globally. For instance, they offered monetary incentives to accounting firms to join international accounting networks and rank top in the industry, which led a succession of mergers.

‘Government departments have supported Chinese accountancy firms to grow stronger and bigger as part of the government’s initiative to facilitate the development of a market economy.’

The other factor driving the company’s success is the high level of professionalism among its staff. Its CPAs have been proactive in upgrading their professional knowledge, attending government workshops to learn about the latest developments in accounting and financial reporting standards. Ruihua also set up committees to enhance professionalism in a number of areas, including strategy and risk management.

‘Our CPAs have accumulated a lot of knowledge in a lot of areas,’ Yang says, adding that their yearly publication on accountancy, Ji Xue Cuo Yao, has become a classic for audit firms in China.

Strong culture

Ruihua’s other strength, says Yang, is its cohesive corporate culture, which is reinforced by a series of mottos and values.

The company’s key mission is to ‘Serve the country with our profession, serve the community with our hearts’. The corporate values of ‘integrity, professionalism, responsibility and creativity’ promote high standards of service among staff.
‘In our daily work, we have internalised our culture and put it into action so that it has deepened our awareness of the importance of our values. This has become a strength for our company’s development,’ Yang says.

Yang is grateful for the support the international networks have given Ruihua, which has helped to facilitate growth. As well as training, head offices have sent partners from affiliates on secondment to Ruihua to share their international experiences with local personnel. There have also been frequent visits between Ruihua and other affiliates.

‘The international networks value Chinese markets highly, and have given big support to our efforts in raising brand awareness,’ Yang says, adding that Crowe Horwath International alone has allocated nearly US$300,000 to Ruihua in the past three years.

In January 2015, Yang was appointed co-chairman of Crowe Horwath International – the first Chinese chairman ever among the top 10 global accounting networks. With responsibility for building CHI’s global impact, Yang expects his new role will help expand the influence of Chinese accounting professionals abroad.

Yang has witnessed the rapid growth of China’s accountancy industry.

At the end of 2014, China had almost 8,300 accountancy firms and nearly 100,000 CPAs.

Power of differentiation

To remain competitive, Yang says his tactic is to differentiate Ruihua from its rivals. As well as building excellence in its existing services, he plans to launch new ones, such as carbon auditing, to differentiate the brand; he also intends to increase the proportion of non-audit work, such as business and tax advisory services.

The company has plans to grow in another direction, too. ‘We established a new department for financial services auditing. We have hired and groomed a large number of financial services auditors, many of whom have overseas working experience and professional qualifications.’

Himself awarded the ACCA Achievement Award last year, Yang has encouraged his staff to enhance their skills by attaining professional qualifications. ‘The ACCA Qualification has helped our staff raise their professional standards and expand their international horizons.’

Now many of Ruihua’s employees are ACCA members and students. ‘Staff with the ACCA Qualification play an important role in our CPA teams, and have become the backbone to developing a global business, which is also our future plan.”

It is not all about business, though. Yang is focusing on building corporate social responsibility in the firm (CSR), and each year it reserves a budget for charitable donations. ‘We aim to raise the CSR awareness of our partners and staff so that our company can assume more social burden and make continuous commitments to society,’ he says.

Sherry Lee, journalist