Hong Kong’s professional accounting body will
not lose its powers for practice review, investigations,
enforcement and discipline despite media reports to the contrary,
the Hong Kong Institute of Certified Public Accountants (HKICPA)

The Ming Pao newspaper published
allegations that the HKICPA would be forced to hand over its
regulatory functions to the territory’s Financial Reporting

The HKICPA is the only body authorised to
register and grant practising certificates to certified public
accountants in Hong Kong. The institute has nearly 30,000 members
and 13,000 registered students.

The newspaper, which quotes an unnamed source,
suggested the institute would be forced to give up all of its
regulatory functions.

No government indication

HKICPA president Wilson Fung said there have
been recent efforts to make the profession less self-regulated and
these allegations come as a surprise.

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He explained the current regulatory system is
only a few years old and there has not been any indication by the
government that it will strip any more of the HKICPA’s regulatory

“We now have every aspect of our regulation
subject to independent oversight – on the council, in our audit
investigations, in our practice review and in our disciplinary
processes. We’re not sitting still and at the moment we are
finishing a consultation on how we award audit practice
certificates and register audit practices,” Fung said.

“We are also addressing the issue of the
unlimited liability of auditors and the imbalance of regulation of
auditors versus the preparers of financial statements. All this is
part of a continuing cycle of improvement.”

HKICPA recently reformed

A regulatory overhaul in 2004 saw the HKICPA
relinquish its investigative powers over listed company audits to
the Financial Reporting Council.

The HKICPA’s disciplinary powers are now
independent of the institute with disciplinary committees composed
of a majority of non-accountants appointed by the government. Their
hearings are also open to the public.

In addition, six out of 22 HKICPA council
members are government representatives or non-accountants appointed
by the government.