China Investigates Accounting Industry

China has begun a review of its accounting firms and plans to close a handful by 1999 in a reform drive, the Business Weekly newspaper reported. Lax accounting regulations are considered a potential hindrance to further investment in China. Last month, securities regulators accused eight newly listed companies of exaggerating their profit-making potential in their prospectus, the report said. Investigators are checking the qualifications of accountants, their ethics and their firms’ capital and operations, the report said. China has about 6,700 certified public accounting firms.