Government proposes independent body overseeing accountants

The government is proposing changing the law to add independent oversight on auditors to match international norms because Hong Kong's current regulatory model is seen to be outdated.

The proposal, which was tabled by the government yesterday for three months of consultations, will expand the power of the government-appointed Financial Reporting Council, which will take over the routine inspection and disciplining of auditors of listed companies from the industry body Hong Kong Institute of Certified Public Accountants.

Secretary for Financial Services and the Treasury Chan Ka-keung said it was vital to have a "robust regime for the regulation of listed entity auditors so as to safeguard the interests of the investing public".

"The Government proposes to reform the regime which is considered by many as largely a self-regulatory regime," Chan said. "The initiative strives to bring Hong Kong's regime in line with international standards that the oversight of the regulation of listed entity auditors should be independent of the audit profession."

The HKICPA will retain the power to register the city's 35,000 accountants, provide training and to set accounting standards.

Set up in 1973, the institute is a self-regulatory body that issues accounting licences, sets industry standards, provides training and regulates accountants. It also conducts routine inspections of accounting firms.