Hong Kong’s Accountant Institute Quietly Announced End of Mutual Recognition Accord with U.S.

The Hong Kong Institute of Certified Public Accountants (HKICPA) issued a supplementary and clarification statement on its official website earlier this month to confirm the agreement of Mutual Recognition Accord which was signed in 2011 with the U.S. International Qualifications Appraisal Board (IQAB) which under the National Association of State Boards of Accountancy (NASBA), will be expired on Dec 31 this year. This has raised concerns about the sustainability of Hong Kong’s status as a global financial center.According to the statement, since the accord came into effect in 2011, IQAB accountants are required to have one year of local experience in order to successfully apply for a practicing certificate in Hong Kong. In the past, U.S. applicants were not allowed to replace work experience in Hong Kong with experience in the U.S. For those who do not meet the requirement may only become a non-practicing member of the Institute.
The requirement for US accountants to have one-year local practice is to ensure overseas applicants are familiar with the relevant legal requirements in order to meet professional standards when performing audits in Hong Kong, HKICPA explained.
The quiet announcement was not reported by local mainstream media, but it has raised criticism on the internet. Some netizen criticized that the HKICPA quietly announced the statement to avoid attentions from public.
Image Source: hongkongfp
They believe that the non-renewal may be related to the loss of licensing power of the HKICPA. Last October, the Legislative Council of Hong Kong passed a bill to take away the HKICPA’s licensing power which allowed the institute to register and grant practicing certificates to certified public accountants in Hong Kong. The licensing authority has been handed over to the Financial Reporting Council (FRC) of Hong Kong SAR which is fully appointed by the Chief Executive of Hong Kong. There were voices expressed concerns about the status of Hong Kong international financial center would be affected.