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China Education Alliance Receives S.E.C. Letter Regarding Non-Compliance Of Former Auditor

HARBIN, China, March 21, 2013 /PRNewswire/ -- China Education Alliance, Inc. ("China Education Alliance" or the "Company", OTCQX: CEAI), a China-based education resource and services company today announced that it has received a letter from the Securities and Exchange Commission ("SEC") regarding the non-compliance of its former auditor.

On March 16, 2013, China Education Alliance received a letter from the Securities and Exchange Commission dated March 15, 2013 informing the Company that the Chief Accountant of the Commission had received a PCAOB Form 3 report issued by the Company's former independent accountant, Sherb & Co., LLP ("Sherb") stating that it had notified the Company on February 14, 2013 that Sherb was not in technical compliance with the concurring partner rotation rules of Auditing Standard No. 7 ("Sherb Letter") and consequently, Sherb's audit report dated April 12, 2011 on the financial statements for the years ended December 31, 2010 and 2009 could not be relied upon.

China Education Alliance never received the Sherb Letter or any notification from Sherb - at any time during or after Sherb's engagement as the Company's independent accountant - of Sherb's non-compliance.

However, upon written request, the Company obtained a copy of the Sherb Letter dated January 31, 2013 on March 20, 2013.  The Sherb Letter stated that Sherb was not in technical compliance with the concurring partner rotation rules of the PCAOB on certain prior audit and review engagements that they performed.  The engagements affected were the audit for the year ended December 31, 2010 and the reviews for the interim periods ended March 31, 2010, June 30, 2010, September 30, 2010, March 31, 2011, June 30, 2011 and September 30, 2011.  As a result of the foregoing, Sherb stated that the Company may no longer place reliance on their audit report and review for such periods.

China Education Alliance's Board of Directors and management continue to believe that the affected audit and reviewed reports fairly present, in all material aspects, the Company's financial condition and results of operations as of the end of and for the periods presented.

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