Chairman’s Speech for the FRC 10th Anniversary Cocktail Reception

Financial Secretary The Honourable Paul Chan, Secretary for Financial Services and the Treasury, The Honourable James Lau, 中聯辦協調部張強副部長, distinguished guests, ladies and gentlemen:

Good evening and a very warm welcome. Thank you for joining us today to celebrate the 10th Anniversary of the Financial Reporting Council. I hope you have enjoyed the premier viewing of our 7 minute video and find it inform​ative. With this prelude, I am told that my speech can be quite short and sweet!

As some of you may recall, after the Enron and Worldcom saga in early 2000, the United States set up the Public Company Accounting Oversight Board as its independent audit regulator while the United Kingdom also expanded the powers and responsibilities of its independent audit regulator, namely the UK Financial Reporting Council. In 2006, Hong Kong established its Financial Reporting Council as an independent audit investigator.

During the last decade, we have managed to diligently discharge our statutory duties with a small group of dedicated staff, but that would not have been possible if we did not also have the support from the Government, the Hong Kong Community and last but not the least the accounting and auditing profession. For example, in addition to our highly committed Council members with diverse backgrounds, our current 20 member strong Honorary Advisory Panel is composed of well respected individuals ranging from business and finance executives, senior counsel and solicitors, as well as senior practitioners from CPA firms. Their knowledge, experience and objectivity have enriched our deliberations on various matters that the FRC had to tackle over the last 10 years. Thank you all for your continued support and guidance.

Looking forward, rest assured that we will continue to handle all complaints fairly and professionally. Whether the complaints are concerning small, medium or big size CPA firms or listed companies, they are handled with the same rigour and all parties involved are always accorded due process. Our independent investigation conclusions are shared with the relevant authorities so that the interests of the stakeholders are properly addressed.

The FRC will also continue to promote international best practice and foster better quality financial reporting in Hong Kong. With the growth envisaged for the Hong Kong capital market and the evolution of the global regulatory landscape, the FRC will no doubt face more complex challenges ahead. A case in point is that many of the listed companies on the Hong Kong Stock Exchange have international operations and offshore associates. Our ability to access relevant information and pursue cross border enforcement will, more and more, depend on the timely cooperation among regulators in different jurisdictions.

"Mutual Reliance" is the spirit shared by members of the International Forum of Independent Audit Regulators as well as between Member States recognised by the European Commission. Our Council very much looks forward to becoming a member of IFIAR when we can meet their basic admission requirement -- that is the FRC must legally become the independent audit regulator of Hong Kong. We also believe that by achieving the EC regulatory equivalence status just as China has, Hong Kong would be better aligned with the audit regulatory regime worldwide. All these much awaited accomplishments will enhance global investors' confidence and further entrench Hong Kong's status and reputation as a robust international financial centre.

Finally, I would like to take this opportunity to thank everyone, particularly our past and present Council members, Financial Reporting Review Panel members, and staff, who have contributed to the success of the FRC during the past decade.

Thank you very much.​