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A joint declaration signed September 5 between mainland and Hong Kong auditing standard setters promises the ongoing convergence between the mainland and Hong Kong's auditing standards.

The China Auditing Standards Board and the Hong Kong Institute of CPAs signed a joint declaration on the convergence of auditing standards on 6 December 2007.

The International Auditing and Assurance Standards Board completed its comprehensive clarity project to improve the clarity of International Standards on Auditing on 27 Februanary 2009 and the Hong Kong Institute of CPAs issued equivalent standards in June 2010. These auditing standards are applied to audits of financial statements for periods beginning on or after 15 December 2009.

The Chinese Institute of CPAs has completed the revision of China Auditing Standards and achieved ongoing convergence with the clarified Hong Kong Auditing Standards. The revised China Auditing Standards were released on 1 November 2010, and will be effective from 1 January 2012.

The only difference between the Hong Kong and mainland standards is an additional standard included in the revised China Auditing Standards about communication between predecessor and successor auditors. This reflects specific requirements and circumstances in mainland and does not conflict with the clarified Hong Kong Auditing Standards.

"The declaration is necessary given the increasing global nature of capital markets, and desire that many companies have to raise capital in multiple jurisdictions. It is important to have a set of standards that are globally compatible," says Philip Tsai, the president of the Hong Kong Institute of CPAs.

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