4 / 98
4
Message from the leadership
Dear members,
The Institute began the year with collaborating and
outreaching as its themes – connecting with our members,
connecting with stakeholders and connecting with the
public. It has been a very fruitful period and our profession
has finished the year with a strong sense of future purpose,
at home, in greater China, and globally.
Stewarding our profession
The government’s public consultation on proposals to
improve the regulatory regime for listed entity auditors
reached a conclusion, signalling the start of a new phase.
We welcome the conclusion that incorporates many of the
Institute’s recommendations, although more clarity is needed
before the legislative process begins.
Under the reform proposals, there will be division of
responsibilities between the Financial Reporting Council
and the Institute with regard to listed entity auditors. The
FRC would become the independent oversight body vested
with inspection, investigation and sanctioning powers,
while the Institute would perform the statutory functions
of registration, setting standards on professional ethics,
auditing and assurance as well as setting continuing
professional development requirements.
Our position is that there should be a clear separation
of sanctioning powers from those of inspection and
investigation within the independent oversight body, which
should also have adequate qualified audit professionals
to effectively perform regulatory functions. In addition,
sanctioning guidelines are needed, and operational costs of
the oversight body should come from investors.
The Institute will continue to engage with relevant
stakeholders and we are confident that with continued
dialogue we will ensure the establishment of an audit
regulation system that meets international benchmarks,
is appropriate to local context and – most importantly –
protects public interests.
After the proposed reform, the Institute will continue
to shoulder important regulatory responsibilities for all of
our members. For practising members, we will continue to
hold investigative, disciplinary and practice review duties on
their non-listed audit engagements, and perform professional
standards monitoring of published annual reports to ensure
financial reporting and audit quality.
Other members who work in business will also be under
the regulation of the Institute. Their professionalism and
ethical behaviour are vital to Hong Kong’s success, whether
they are working in management of information systems,
risk, treasury, corporate finance, corporate governance,
compliance, taxation, restructuring, forensic accounting, to
name but a few areas.
In addition, the Institute will keep on strengthening its role
in setting accounting standards that the profession adheres
to – standards which have established Hong Kong’s accounting
profession as one of the world’s most respected, and our city as
one of the most trusted places to do business. Our Qualification
Programme will continue to set a high benchmark to ensure the
quality of entrants entering the profession.
Meanwhile, we are firm believers of practising what we
preach when it comes to good governance, which is why we
will also be putting the Institute’s own operations under the
microscope. We have ambitious plans to re-examine the entire
governance and management structures of the Institute, to
ensure it is fit for future challenges.
In the past three years, the average annual growth
rate of the Institute’s membership has been more than 4.5
percent, illustrating the strength of our profession. Along
with a thorough review of our regulatory processes and our
Qualification Programme, we will leave no aspect of the
Professional Accountants Ordinance unexamined to make
sure our profession is up to date and ready to flourish in
years to come.
Mainland and global outreach
Another ongoing theme for the year was the Institute’s
commitment to increasing the depth and breadth of
opportunities available to members.
We understand that many of our members work with or in
companies on the Mainland, so we maintained outreach and
“The government’s public consultation
on proposals to improve the
regulatory regime for listed entity
auditors reached a conclusion,
signalling the start of a new phase.”