In a written reply to a question in the Legislative Council, Secretary for Financial Services and the Treasury, Professor K C Chan, disclosed that the Government could join with the Financial Reporting Council (FRC) and the Hong Kong Institute of Certified Public Accountants (HKICPA) to formulate proposals to reform Hong Kong’s auditor oversight regime. Firstly, Chan confirmed that, to enhance Hong Kong's status as an international financial center, it is important that Hong Kong maintains an effective regulatory regime for the accounting profession on par with international standards and practices, so as to enhance market confidence in its financial reporting and corporate governance. To this end, the FRC was established in 2006, following public consultations and thorough discussions among the Government, the HKICPA, the Securities and Futures Commission and the Hong Kong Exchanges and Clearing Limited, and in line with the international trend towards making the oversight of auditors and financial reporting of listed entities more independent from the accounting profession. http://www.tax-news.com/news/Hong_Kong_Could_Improve_Its_Auditor_Oversight_Regime____59967.html

1. In a written reply to a question in the Legislative Council, Secretary for
Financial Services and the Treasury, Professor K C Chan, disclosed that
the Government could join with the Financial Reporting Council (FRC)
and the Hong Kong Institute of Certified Public Accountants (HKICPA) to
formulate proposals to reform Hong Kong’s auditor oversight regime.
Firstly, Chan confirmed that, to enhance Hong Kong's status as an
international financial center, it is important that Hong Kong maintains an
effective regulatory regime for the accounting profession on par with
international standards and practices, so as to enhance market confidence
in its financial reporting and corporate governance.

2.  To this end, the FRC was established in 2006, following public
consultations and thorough discussions among the Government,
the HKICPA, the Securities and Futures Commission and the Hong
Kong Exchanges and Clearing Limited, and in line with the
international trend towards making the oversight of auditors and
accounting profession. 
financial reporting of listed entities more independent from the
 Under the present statutory regulatory regime, the FRC is
responsible for investigating possible auditing and reporting
irregularities in relation to listed entities and enquiring into their
possible non-compliance with accounting requirements, whilst the
HKICPA is responsible for all other regulatory functions with
regard to the accounting sector, including the supervision of
accounting firms providing services for listed and non-listed
entities.
 Currently, the FRC conducts investigations on auditing and
reporting irregularities in relation to listed entities, while the
HKICPA would conduct investigation on auditing and reporting
irregularities in relation to non-listed entities. There is therefore no
duplication between the statutory roles of the FRC and the
HKICPA with regard to the regulation of accounting professionals.

3.  Furthermore, to ensure coordinated efforts in overseeing
the auditors and financial reporting of listed entities, the
FRC and the HKICPA hold regular meetings to discuss
matters of common interest. Specifically, the FRC

maintains regular dialogues with the HKICPA to ensure
that there will not be any overlap of efforts to review
financial reports of listed entities under their respective
financial report review programs.
 However, having regard to the possibility of enhancing
the independence of the regulatory regimes for the
accounting profession, the Government would welcome
talks with the FRC and the HKICPA to formulate
proposals to further enhance the independence of the
auditor oversight regime for listed companies.
 Chan emphasized that the Government would take into
account the need to enhance effective enforcement, and to
minimize compliance burdens, in mapping out the reform
proposals for public consultation that may arise out of
those talks.