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FRC Bill developments

Effective dates of Financial Reporting Council (Amendment) Ordinance

On 6 May the government gazetted 1 October as the effective date of the Financial Reporting Council (Amendment) Ordinance 2019. This is the date when the responsibility for regulating the auditors of listed companies will pass from the Institute to the FRC. The Institute will continue to work with the FRC to ensure a smooth transition of powers. From 2022, the FRC will be funded by a levy on securities transactions, paid by both buyers and sellers, in addition to levies paid by listed companies and their auditors.

Media Coverage

 

Financial Reporting Council (Amendment) Bill gazetted

On 30 January, the Financial Reporting Council (Amendment) Bill 2018 was enacted by the Legislative Council and was gazette on 15 February. The Financial Reporting Council will assume full responsibility for the regulation of auditors of listed companies at a date yet to be determined. The reform caps over a decade of work from the Institute and government and transitions Hong Kong from self-regulation to independent oversight – bringing Hong Kong's regulatory regime for auditors in line with the international standard and practice. The development also further strengthens Hong Kong's reputation as an international financial centre.

 

Before the FRC takes over, the Institute will further discuss with the Financial Services and the Treasury Bureau and the FRC to resolve outstanding issues and to ensure smooth transition and effective operation under the new regime. We will also contribute the views of the profession to the process of establishing the FRC's oversight of some of the Institute's functions.


Media Coverage

 

 

Financial Reporting Council (Amendment) Bill 2018

In January 2018 the government gazetted the Financial Reporting Council (Amendment) Bill 2018, as its legislative approach to the regulation of the auditors of listed entities. You can find more details about the Bill on the Bills Committee page of the Legislative Council website.

 
 

The Institute published a media statement in response to the gazettal on 19 January: 

 

 

Media Coverage

 

 

Third Bills Committee Meeting (10 April)

The third meeting of the Bills Committee took place on 10 April. Before the meeting the Institute returned a written submission (English / Chinese translation) in response to the request by Committee members on four key issues raised at the second meeting, namely:

  1. Guidance on sanctions determination and application;
  2. Regulation of non-Hong Kong auditors;
  3. EU equivalence; and
  4. The scope of assurance engagements covered by the Bill.

 

The Chief Executive and Registrar Raphael Ding also submitted bylined articles about the FRC (Amendment) Bill to two media outlets.


Media Coverage

 

 

Second Bills Committee Meeting (20 March)

On 9 March the Institute submitted its detailed response to the Bill.

 

 

The second meeting of the Bills Committee took place on 20 March. The committee met with stakeholders including the Institute, accounting firms and other associations. Their submissions can be found on the meeting website.

 

 

At the meeting Chief Executive and Registrar Raphael Ding highlighted some key areas of concern for the Institute. You can view his speech in Chinese or in English. You can also read the speech here (in Chinese).

 

Media Coverage

 

 

Background and previous consultations

Institute press release before the FRC amendment bill was published (October 2016)

Late in 2016 and in anticipation of the release of the FRC Amendment Bill, the Institute published a press release reiterating its position on audit regulatory reform. The press release is available here:

 

 

Government consultation

After the Institute's consultation finished, the government consulted stakeholders and the public from June to September 2014. More details about this consultation are available here: 

 

Government consultation (2014)

 

Government consultation conclusions and the Institute's response (June 2015)

 

Institute consultation

The Institute conducted a consultation with its members regarding the reform of audit regulatory regime from October 2013 to January 2014. For more details about this consultation see: 

 

Institute consultation (October 2013 – January 2014)

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