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September 30, 2019

Hong Kong’s FRC and HKICPA sign Statement of Protocol on Oversight Arrangements

Hong Kong’s Financial Reporting Council (FRC) and the Hong Kong Institute of Certified Public Accountants (HKICPA) have signed a Statement of Protocol on Oversight Arrangements to advance collaboration in anticipation of the commencement of the Financial Reporting Council (Amendment) Ordinance 2019 (the Amendment Ordinance) on 1 October 2019.

Under the Amendment Ordinance, the FRC is vested with direct powers of inspection, investigation, discipline concerning auditors of Public Interest Entities (PIE) and recognition of overseas PIE auditors, and powers of oversight of the performance of the HKICPA in relation to registration of, setting of CPD requirements, and setting of standards on professional ethics, auditing and assurance for registered PIE auditors.

Under the Statement of Protocol, the FRC will have access to information in relation to the HKICPA’s performance of the registration of PIE auditors, matters concerning the setting of CPD requirements for PIE auditors and the setting of standards on professional ethics, auditing and assurance for registered PIE auditors.

Periodic activity reports in relation to the oversight functions will be provided by the HKICPA to the FRC, who will conduct regular assessments of the HKICPA’s performance in the respective areas.

FRC chair Kelvin Wong said: “The Statement will facilitate the FRC in discharging our statutory oversight duty effectively as the independent auditor regulator of Hong Kong. Charged with the oversight responsibility, the FRC looks forward to working closely and effectively with the HKICPA so as to improve the quality and competence of the PIE auditors and the competitiveness of the entire audit profession in the long run. We would like to express our heartfelt thanks to the Financial Services and the Treasury Bureau for their continued support.’’

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