18 September 2014
Dear members,Audit regulation consultation íV give your views by the deadline tomorrow
On Tuesday I advised you that the Institute's response to the public consultation on reform of regulation of listed company auditors had been submitted to the Financial Services and the Treasury Bureau and provided you with a link to the response. I hope that you have taken the time to read our response, which was formed by extensive consultation with our members and other stakeholders, on this matter of great importance to our profession and I encourage you to contribute your own views by responding directly to the FSTB by the consultation deadline tomorrow, 19 September.
One of the main issues raised by the consultation that I would like to draw your attention to is the way in which the proposed independent regulatory body will exercise its expanded powers of investigation, inspection and enforcement. We are not arguing that an independent regulatory body should not have these powers, indeed we recognize that they are necessary for effective regulation. However, we believe that while it is necessary to maintain independence from the auditing profession, within the overall structure of the independent regulatory system there should be clear and effective separation of inspection/investigation and enforcement responsibilities and decision making. There should be checks and balances to ensure that decisions on enforcement and sanctions are not made by the same people that carry out and conclude on inspections and investigations. In our submission, the Institute has made very specific proposals on regulatory processes and sanctioning guidelines (annexes 1 and 2), which we believe will strike the right balance between efficiency and procedural fairness.
Please add your voice to this and other matters raised by the consultation. The outcome will have a significant and lasting effect on the auditing and accounting profession in Hong Kong. Visit our dedicated web page for more information.
| Yours sincerely,
Hong Kong Institute of CPAs