Hong Kong is critical bridge between China and the world for accounting sector: Paul Chan
Ministry of Finance will continue to support Hong Kong in cross-border accounting regulation and talent nurturing, vice-minister says
Since 2022, Hong Kong has been the nerve centre for the Public Company Accounting Oversight Board’s (PCAOB’s) annual inspections into the audits of US-listed mainland companies, which Chan said underscored the city’s crucial role in the process. The PCAOB is a Washington-based non-profit organisation that oversees audits of US-listed public companies.
In August 2022, China’s Ministry of Finance, the China Securities Regulatory Commission and the PCAOB signed an agreement that paved the way for Beijing to allow overseas inspectors to review the audit records of Chinese companies. The PCAOB had previously said it could not verify the quality of the audits on the companies in question.
“Thanks to the unwavering support of the Ministry of Finance, [Hong Kong’s audit regulator] is able to access and inspect audit working papers in both Hong Kong and on the mainland,” Chan said in a speech at the first regional regulatory forum hosted by the Accounting and Financial Reporting Council (AFRC), the city’s audit regulator.
“Hong Kong has become what it is because international investors and businesses have confidence in us,” Chan said to around 350 professionals and regulators from the city, the mainland and overseas.
The inspections in Hong Kong have been successful, with PCAOB in December 2022 declaring it was able to inspect audit firms serving mainland Chinese companies listed in the US, removing the risk of delisting hanging over about 170 such firms. Previously, the US threatened to force these firms out of the US market for it could not inspect their auditors.
