The Accounting and Financial Reporting Council (AFRC) has strengthened its commitment to financial reporting in Hong Kong by launching a webpage aimed at addressing the issue of bogus Certified Public Accountants (CPAs).
The newly established webpage will provide the public with information regarding the legal requirements for signing audited accounts.
Although the AFRC has not encountered any reported cases of fraudulent CPAs, there is said to be a rising concern over audit quality issues.
Some practicing accountants have been found to compromise on audit quality and professional standards, by taking on excessive audit projects through intermediaries and signing audit reports without applying due diligence.
To combat these malpractices, the AFRC is introducing a series of measures in collaboration with the Financial Services and Treasury Bureau, the Inland Revenue Department, and the Hong Kong Institute of Certified Public Accountants (HKICPA).
One such measure is the amendment of the Hong Kong Standards on Auditing, which will now require all auditors to display their practicing certificate number on the audit reports they issue.
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By GlobalDataIn addition, Hong Kong-based companies will be obligated to include the practicing certificate number of their auditors in their profits tax returns.
AFRC CEO Janey Lai said: “We are deeply concerned about accounting misconduct that could undermine the overall quality of financial reporting. While ‘bogus’ accountants may not be apparent, it is alarming that practicing accountants are signing off on audit projects indiscriminately without ensuring due diligence on audit quality.
“The quality and credibility of financial reporting are paramount, and these must not be compromised by audit firms that recklessly sign off on projects in massive volumes.”
AFRC is an independent body established under the Accounting and Financial Reporting Council Ordinance. It works on protecting the public interest by leading the accounting profession to raise professional accountants’ level of quality.
