Exclusive | Hong Kong’s accounting watchdog ready to flex regulatory muscle after accumulating all disciplinary roles, chairman says
- Accounting and Financial Reporting Council has handled a substantially higher volume of complaints and investigations over the past five years since it gained more power, chairman says
- Ready to show how Hong Kong’s independent audit regulatory regime may enhance financial reporting quality and public trust
Complaints received by the Accounting and Financial Reporting Council (AFRC) almost tripled to 169 in January this year compared with 56 cases in 2019, while the number of investigations jumped almost five times to 207 from 46 in the same period, according to council data.
“The numbers speak for themselves,” Kelvin Wong Tin-yau, the AFRC’s chairman, said in an interview. “The number of complaints we received from other regulators and from the public has increased over the past five years since we gained more power, which indicates we have established ourselves as an independent accounting regulator.
“Likewise, the number of investigations we can handle is getting higher, which is reflected in our higher headcount and budget.”
The AFRC, formerly known as the Financial Reporting Council, was first set up by the Hong Kong government in 2006. But back then it only handled investigations, while other regulatory functions were carried out by the Hong Kong Institute of Certified Public Accountants (HKICPA).
Following reforms in 2019, the council took over all disciplinary and regulatory inspections of listed companies’ auditors from the HKICPA, while it also received HK$400 million (US$51 million) from the government to expand its headcount from just 25 staff five years ago to 145 currently.
