Updates on the further reform on the regulatory regime of accounting profession (27 August 2021)

Dear members,

The Institute continues its engagement and communication work in response to the reform of the accounting profession and would like to provide updates on the latest development.

Findings of the survey

Our survey on the proposals closed on 4 August with over 500 responses from members and Qualification Programme students. The majority of respondents agreed that:

A working group consisting the Institute, the Financial Services and the Treasury Bureau (FSTB) and the Financial Reporting Council (FRC) should be set up to gauge views from stakeholders and to ensure a smooth transition;
The Government should conduct more consultation; and
The compliance burden of non-public interest entity auditors and CPAs may increase after the transfer of functions.

The results also identify that concerns remain on key matters such as the future compliance costs and burden, particularly for small and medium practices, as well as the future funding of the Accounting and Financial Reporting Council as the FRC will be renamed. As to the Institute’s value after the reform, the top three areas are encouraging and facilitating continuing professional development, representing the views of the profession, and ensuring the Institute’s professional education and assessment matches changing practices and expectations.

We thank members and students for taking time to respond to the survey. The views they shared are useful for us in formulating our response and determining our further actions in support of the profession.

Holding meetings with the FRC

Since the bill moved to the legislative stage we have held a number of meetings with the FRC to discuss the legislation, and future arrangements. The Institute and the FRC shared their views on the bill, any areas where both parties feel clarification is necessary, and operational matters for assessing the potential impacts on both the organizations and Institute members. Further meetings on operational matters and information sharing to facilitate knowledge transfer from the Institute to the FRC will take place after the bill is passed, which is currently envisaged to be in October 2021. These meetings will help to ensure that the transition will be as smooth as possible and that the regulatory regime is as consistent as possible for members.

Sharing the profession’s views with the Government

After the first meeting of the Bills Committee on Financial Reporting Council (Amendment) Bill 2021 on 12 August a three-week open submission period on the bill began, which closes on 3 September.

We are preparing our submission based on our analysis of the bill, clarifications sought from the FSTB, and the views of Council. Once we have submitted our response we will inform members accordingly.

Preparing for an EGM on 30 September

We believe that the Institute has an important role to play in collecting your views and reflecting them to the government. The Council has resolved to hold an extraordinary general meeting (EGM) on Thursday, 30 September on the reform. The EGM notice will be posted on Wednesday, 1 September and relevant materials will be released on this date. We hope that you will take part in this EGM.

As a reminder, to help you keep track of the progress of the bill and other developments, our webpage on the reform is updated regularly with the latest information

Yours sincerely,

Hong Kong Institute of Certified Public Accountants

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