Hong Kong’s Financial Reporting Council has gained additional powers following the passage of the Financial Reporting (Amendment) Bill by the Legislative Council.

Under the new legislation, the FRC will assume the following regulatory functions from the Hong Kong Institute of Certified Public Accountants (HKICPA):

i. issuance of practising certificates to certified public accountants (CPAs);
ii. registration and inspection of practice units;
iii. investigation and discipline of all CPAs, certified public accountants (practising) and practice units; and
iv. overseeing the remaining statutory functions of the HKICPA:

          a) setting of requirements for and provision of continuing professional development;
          b) setting of standards of professional ethics, and setting of accounting and auditing standards; and
          c) registration of CPAs including conducting qualifying examinations for CPAs and mutual and reciprocal recognition of accountants with overseas accountancy bodies.

The legislation aims to enhance the independence of the regulatory regime for the accounting profession in Hong Kong. A date is yet to be set for the legislation to come into force.

The next step in the legislative process will be the enactment of subsidiary legislation to provide for the transitional arrangements and the transfer of functions to the FRC.

FRC CEO Mark Grabowski said: “We will continue to work closely with the Government, the HKICPA and all stakeholders on the proposed subsidiary legislation. To ensure a seamless transfer of those functions, we will devote ourselves to preparing for an efficient commencement of the new regime, including the development of policies and procedures for our new functions that reflect our principle of striving for effective regulatory outcome through efficient process.”

FRC chair Kelvin Wong said: “The enactment of the new legislation marks the genesis to the healthy development of the accounting profession in Hong Kong. I am confident that the FRC will be ready to take on the additional functions and challenges with a view to promoting a market that is good and fit for long-term sustainable development, thereby strengthening Hong Kong’s position as an international financial centre.”