HONG KONG AUDIT REGULATION CONSULTATION

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Professor-K-C-Chen
Secretary for Financial Services and the Treasury Professor K C Chen

The Hong Kong Government released the conclusions of the public consultation on proposals to improve the regulatory regime for listed entity auditors. The Secretary for Financial Services and the Treasury Professor K C Chan said: “We are pleased to note that an overwhelming majority of respondents is supportive of the proposed reform to have the oversight of the regulation of listed entity auditors independent of the audit profession. The initiative will bring Hong Kong’s regime in line with international standards, offering benefits to the audit profession and the investing public, as well as reinforcing Hong Kong’s status as an international financial centre and capital market.” Professor Chan added: “Having regard to the useful comments received during the consultation period, we have refined the relevant proposals, including facilitating registration by eligible auditors, providing a clearer definition of responsible persons of listed entity auditors to be registered under the new regime and their statutory duties, and enhancing the checks and balances against the exercise of new regulatory powers by the Financial Reporting Council (FRC) under the new regime.” Under the reform proposals, the FRC will become the independent auditor oversight body vested with direct inspection, investigation and disciplinary powers with regard to listed entity auditors, while the Hong Kong Institute of Certified Public Accountants (HKICPA) will perform the statutory functions of registration, setting continuing professional development requirements and standards on professional ethics, auditing and assurance with respect to listed entity auditors under the new regime, subject to oversight by the FRC.

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