Hong Kong has historically sat between East and West as a global financial hub. Given the worldwide concerns with corporate governance and transparency, it must be a fascinating time to be involved with its Financial Reporting Council. What is your role?
My priority at the moment is to complete investigations initiated before I joined the council in April 2010. Furthermore, we're considering the introduction of a risk-based approach in the review of listed entities' financial statements. I'm responsible for the day-to-day management of the council, for leading investigations into possible auditing and reporting irregularities by listed entities, and for heading inquiries into cases of possible non-compliance with the financial reporting requirements.
I report to the council, which is led by a non-executive chairman. In addition, I have to communicate and maintain working relationships with other local, Chinese mainland and overseas regulators, and with the government of the Hong Kong Special Administrative Region, as well as to promote the work of the FRC.
How was Hong Kong affected by the global financial crisis? And how is it recovering now?
The local economy was hit hard initially--the pace of deterioration and the depth of decline in external trade were unprecedented in decades. But the government introduced a number of measures to shore up the financial system, support enterprise and preserve jobs. These helped to stabilise the economy.
As the downturn in the US began to slow, Asia's economies started to improve. In particular, GDP growth on the Chinese mainland quickly regained its momentum following forceful stimulus measures by the mainland authorities. Hong Kong's economy benefited from this.
The stated mission of the FRC is "to promote confidence in Hong Kong's regulatory framework for the accounting profession" and "oversee the quality of financial reporting". How is it doing this?
The self-regulatory regime for the Hong Kong auditing profession was established in 1973. Confidence in the profession was brought into sharp focus after the corporate scandals in the US. The council was set up in 2006 following proposals by the Hong Kong Institute of Certified Public Accountants in 2003 to address the issues of independence and transparency that arose in the institute's investigation into auditors.
To promote confidence in, and enhance the quality of, corporate financial reporting, a financial reporting review panel was established as...