The Hong Kong Institute of Certified Public Accountants states there has not been any indication from the government of any intent to replace the institute and transfer all its regulatory functions to the Financial Reporting Council, as suggested by an article published by Ming Pao, one of the territory's daily newspapers.
The Ming Pao report quotes an unnamed source saying the government will ask the institute to hand over its powers for practice review, investigations, enforcement and discipline.
The institute agrees that regulation of the accounting profession is an important public interest issue for Hong Kong's success as a financial centre. The institute initiated a major regulatory overhaul in 2004, in which it ceded a number of its regulatory powers to independent oversight. The result is that the profession is no longer purely self-regulatory.
The institute's investigative powers over listed company audits were passed to the Financial Reporting Council, which was established in mid-2007. Its disciplinary powers are now independent of the Institute with Disciplinary Committees composed of a majority of non accountants appointed by the government, and their hearings are open to the public. The institute's governing body, the council, composed of a total of 22 members, now has six members who are government representatives or non-accountants appointed by the government.
"The full structure of our new regulatory system is only a few years old," notes Wilson Fung, president of the institute. "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 shares they are also addressing the issue of the unlimited liability of auditors and the imbalance of regulation of auditors versus the preparers of financial statements.