Reforms will help ensure reliability of financial information provided by mainland companies listing in Hong Kong
THE RECENT ENACTMENT of the Financial Reporting Council Ordinance completes a series of significant reforms to the accounting and auditing profession that began in the wake of a string of international accounting scandals more than four years ago.
Gazetted in July, the ordinance provides for the establishment of a Financial Reporting Council (FRC) to investigate suspected irregularities committed by auditors and reporting accountants of listed entities, and to inquire into non-compliances of listed entities' financial reports with legal, accounting or regulatory requirements.
The world's accounting and auditing profession has had to reshape itself to regain much of the public trust lost through corporate shenanigans and auditing failures.
In Hong Kong, much of the reshaping and reform has also been attributable to the fact that the territory is increasingly recognised as a major capital market and as the window to China, according to Winnie Cheung, chief executive and registrar of the Hong Kong Institute of Certified Public Accountants (HKICPA).
'The local accounting profession is in the spotlight mainly because of China's development. More than 90 per cent of all overseas mainland Chinese listings are now taking place on the Hong Kong stock exchange. Hong Kong accountants occupy a very important role in providing quality assurance to the financial information provided by Chinese companies for the world's capital markets.'