The licensing body for accountants and auditors in Hong Kong has expressed shock at an attempt by authorities to extend the supervisory reach of their own watchdog without having consulted the sector.
News of the government’s plan came as a bombshell, according to Li Kin-hang, vice president of the Hong Kong Institute of Certified Public Accountants. They had learned about it only a few days ago, as the government did not seek industry views beforehand, he told a radio program on Thursday.
Li said the government failed to release enough information about the structural change and added that the sector was shocked.
Founded in 1973, the institute is the only body authorized by law to register and grant practicing certificates to certified public accountants in Hong Kong, its website shows. The institute also registers accounting firms and auditors as part of its main responsibilities.
Secretary for Financial Services and the Treasury Christopher Hui unveiled in his official blog on Tuesday the government’s intention to transfer these roles to the statutory Financial Reporting Council.
The proposed change, which must pass Legislative Council vetting scheduled next year to be enacted, aims to reallocate the institute’s regulatory power on auditors and accountants to the Financial Reporting Council.
Hui’s announcement followed the institute’s decision to select its president by “one man, one vote” starting next term. The sector is seen as dominated by democracy supporters.
The financial services secretary said the change was to avoid giving the public a wrong impression that “the industry investigates its own members.”
“It’s not really a matter of weakening the power,” Hui explained on Wednesday. “If you put that against the backdrop of a global international trend to have independent regulation of the accounting profession, that’s why we have come up with this new proposal.”
Li insisted that the government was trying to weaken the institute’s authority. The institute did invite people outside the industry to serve on panels holding internal disciplinary hearings, he said.
The institute’s board of directors would hold a special meeting this week to study whether it could consult the industry as soon as possible within a limited time, he added.
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