• Register
Return to: Home > News > Standards > Hong Kong regulatory oversight not strong enough: FRC

Hong Kong regulatory oversight not strong enough: FRC

Regulatory oversight in Hong Kong failed to keep up with international practices according to a report by the Hong Kong Financial Reporting Council (FRC).

The FRC had commissioned the report to Deloitte UK in order to assist the government in drafting reforms to enhance the independence of Hong Kong's audit regulatory regime.

The report found that Hong Kong does not currently meet the requirements for membership of the International Forum of Independent Audit Regulators (IFIAR) nor does it currently meet the European Commission (EC) regulatory equivalence requirements.

Seven gaps for which Hong Kong falls behind international practices are detailed in the report. Amongst which the governance structure of the Hong Kong Institute of Certified Public Accountants (HKICPA) and its source of funding.

While most major jurisdictions around the world have toughened their audit oversight following the Enron scandal by putting in place independent regulators, Hong Kong retained a system of self-regulation.

FRC chairman John Poon said: "Following the collapse of Enron in 2002, the global audit regulatory framework has undergone a significant evolution over the past decade and is still evolving. Independent audit oversight has become the norm for international financial centres such as the United Kingdom and the United States."

He added that the report confirmed that 40 jurisdictions around the world met both regulatory and membership requirements of the EC and the IFIAR. "Our report further explains the areas of our audit regulatory regime which require enhancement in order for Hong Kong to achieve the same status," he said.

The government is expected to lead a public consultation in 2014 on the issue.

Related links :

Report on independent audit oversight

Financial reporting council

Hong Kong Institute of Certified Public Accountants

 

Top Content

    ARGA team, assemble!

    The new top team has been named that will see in root-and-branch reform at the Financial Reporting Council (FRC) as it transforms into the Audit, Reporting and Governance Authority (ARGA). Will the new duo be as dynamic as some are hoping? Robin Amlôt reports.

    read more

    FASB: a quest for simpler standards

    FASB chair Russell Golden addressed the IMA 2019 Annual Conference and Expo at the Sheraton San Diego Hotel and Marina, California, on 18 June. IMA immediate former chair-emeritus Alex Eng acted as moderator. Joe Pickard reports.

    read more

    The future of audit, and how to get there

    Two recent reports peer into the future of the audit profession. One analyses what an audit should offer, while the other looks at how the audit process will be carried out. Robin Amlôt takes a closer look at both.

    read more

    EFAA elects new president, focuses on digital future

    EFAA’s new president, Salvador Marin, outlined his key priorities for the next two years at the organisation’s 2019 annual general meeting, while outgoing president Bodo Richardt offered advice. Robin Amlôt reports.

    read more
Privacy Policy

We have updated our privacy policy. In the latest update it explains what cookies are and how we use them on our site. To learn more about cookies and their benefits, please view our privacy policy. Please be aware that parts of this site will not function correctly if you disable cookies. By continuing to use this site, you consent to our use of cookies in accordance with our privacy policy unless you have disabled them.