Hong Kong’s Accounting and Financial Reporting Council (AFRC) has released its annual oversight report examining the Hong Kong Institute of Certified Public Accountants’ (HKICPA) performance on specified functions.
The assessment was made for a period of one year, from 1 April 2025 to 31 March 2026.
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The regulator noted that the HKICPA had responded to points raised in the previous year’s report and had made headway on observations flagged earlier.
The assessment was based on several oversight activities.
These included attending 40 HKICPA meetings dealing with specified functions, examining quarterly activity reports, carrying out on-site assessments, and holding discussions with the institute’s leadership and committee members.
Among the areas showing improvement was a reduction in continuing professional development (CPD) non-compliance among certified public accountants (CPAs).
Despite the fall, the report found that CPD non-compliance remains at a “persistently high level” and that late renewals of CPA status were “widespread”.
It also pointed to scope for tighter fit and proper assessments, as well as better support for putting professional standards into practice.
While the institute’s work has helped bring the rate down, 14% of sampled members in 2025 failed to meet the requirement to keep their knowledge and skills “up to date”.
The AFRC has suggested the HKICPA carry out a full root cause analysis and draw up a targeted action plan aimed at cutting the non-compliance rate to 5% or lower in the near term, with the eventual goal of reducing it to a negligible level.
On renewals, the report found that almost a quarter of CPAs completed their renewal after the statutory deadline in the 2026 cycle.
More than 500 CPAs who had been struck from the CPA register were later reinstated once they had paid an administrative fee.
In the AFRC’s view, firmer measures are required to underline the significance of statutory deadlines and prompt timely renewal.
Two further areas were singled out for strengthening.
On fit and proper assessments, the AFRC recommended going beyond reliance on self-declarations to independent monitoring of regulatory sanctions and bankruptcies.
It also recommended strengthening support for the practical application of professional standards. It suggested that the HKICPA identify implementation difficulties in order to refresh local guidance, introduce practical prompts within the Audit Practice Manual and improve eLearning courses.
The HKICPA has accepted all of the AFRC’s recommendations and has begun follow-up work.
AFRC CEO Janey Lai said: “The AFRC appreciates the HKICPA’s constructive engagement with the oversight process.
“Its follow-up actions on AFRC’s recommendations demonstrate a clear commitment to continuous improvement, stronger regulatory outcomes and maintaining public confidence in the accounting profession.
“We will continue to work closely with the HKICPA to strengthen professional standards, encourage compliance and safeguard the public interest.”
