The Financial Reporting Council (Amendment) Bill 2021 was gazetted today to further develop the Financial Reporting Council into a full-fledged independent regulatory body for the accounting profession.

Under the proposed regime, regulatory powers vested with the Hong Kong Institute of Certified Public Accountants will be transferred to the Financial Reporting Council, including issue of practising certificates, registration of practice units and local public interest entities auditors, inspection, investigation and discipline over practice units as well as investigation and discipline over certified public accountants.

In transferring these regulatory powers to the council, the scope of the powers and the types and levels of relevant sanctions will follow the regime currently implemented by the institute.

The institute will continue to discharge functions including ascertaining qualification for registration as certified public accountants by conducting examinations, registering certified public accountants, setting standards on professional ethics, accounting, auditing and assurance as well as setting requirements for continuing professional development. These functions will be under the council's oversight.

Secretary for Financial Services & the Treasury Christopher Hui said the bill seeks to further enhance the independence of the regulatory regime of the accounting profession in line with international developments with increased coherence and efficiency.

“The principle of proportionality will be adopted in the Financial Reporting Council's future exercises of its proposed regulatory functions over the accounting profession that is different when compared to the existing regulation over public interest entities auditors.

“For all the regulatees to be newly handled by the council including small and medium practices which do not work on public interest entities engagements under the proposed new regime, the regulatory scope and requirements applicable to them will remain comparable to those currently provided in the Professional Accountants Ordinance.”

The Legislative Council Panel on Financial Affairs was briefed on the proposed reform on July 5. The bill will be introduced into the Legislative Council for the first reading on July 21.