Hong Kong-listed mainland companies have been relieved from an obligation to hire Hong Kong accounting firms to do their annual audits, if their books are audited by a mainland firm, reports the South China Morning Post.
The mainland auditor must be among a list of 12 firms approved by the Ministry of Finance.
The new rule is expected to affect the business of Hong Kong's accounting firms since auditing contributes more than 60% of businesses. Mainland firms, however, may still hire Hong Kong auditors.
"I do not think all 164 mainland firms will change to mainland auditors immediately, as some would like to take a wait-and-see approach to see how international investors respond to the new rule," Hong Kong Institute of Certified Public Accountants president Philip Tsai Wing-chung told the Post. "But it would be inevitable that some mainland firms may choose to hire mainland auditors later on. As a result, we are going to see some loss of auditing business.
Despite the expected loss of business, Hong Kong accounting firms will also benefit from the new rule as it allows Hong Kong companies listed on the mainland to hire the services of Hong Kong accountants and auditors.
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