Hong Kong’s New Regulatory Regime for the Accounting Profession
Gazetting of subsidiary legislation to bring change to HK’s accounting profession.
The Hong Kong Government is introducing new legislative measures by gazetting several subsidiary legislations. These amendments and ordinances will change HK’s accounting profession by establishing a new regulatory regime. They aim to ensure the profession’s transitional long-term development with efficient regulation.
Beginning on October 22, 2021, the HK Government has been instituting changes with legislative amendments. This is the date of the Legislative Council’s enactment of the Financial Reporting Council (Amendment) Ordinance 2021. This ordinance aims to provide transitional independence to the Financial Reporting Council. The Council is now known as the Accounting and Financial Reporting Council or AFRC.
The AFRC is an independent regulatory body overseeing all matters about the profession. This will include registration, inspection and investigation, practice certificate issuance, and disciplinary issues. Further, the AFRC also has a supervisory role over the Hong Kong Institute of Certified Public Accountants (HKICPA).
Subsidiary Legislations, Ordinances and Amendments
The change in subsidiary legislation starts with the Financial Reporting Council (Amendment) Ordinance 2021 (Commencement) Notice. It sets the general commencement date for the Amendment Ordinance as October 1, 2022. However, an exception to this arises concerning the formation of the statutory advisory committee. The committee falls under the purview of AFRC, the Secretary for Financial Services and the Treasury.
Collectively, these authorities will be able to sanction changes and amendments at an earlier date. With regards to this, the Amendment Ordinance regulatory charge will commence from July 4, 2022, onwards.
Next is the Accounting & Financial Reporting Council (Transitional & Saving Provisions & Consequential Amendments) Regulation. This regulation aims to establish provisional measures that will help ease the commencement of the new regulatory regime. It efficiently manages all ongoing or pending cases being dealt with by HKICPA and AFRC. It will also address any subsequent revisions that may arise in relation to other subsidiary legislation and ordinances.
Finally, there’s the Accounting & Financial Reporting Council Ordinance (Amendment of Schedule 3B) Notice 2022 (Schedule 3B Amendment Notice). The changes here will establish the payment rates and tiers for the accounting profession from October 1, 2023. These include renewal, registration of practice units, issuing practising certificates, etc. Overall, the fee structure will continue to reflect the HKICPA’s existing schedule for collection by the AFRC.
New Regime, New Rules
As the accounting profession in Hong Kong undergoes legislative transformation, it is necessary to keep up with the changes. The right partnership can help navigate any shifts and avoid unnecessary business setbacks. From HK business advisory to accounting and tax services, 3E Accounting is ready to assist.
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