RECOGNITION OF OVERSEAS AUDITORS

As from 1 October 2019, the amendments to the Financial Reporting Council Ordinance (the FRCO) take effect and the Financial Reporting Council (the FRC) becomes Hong Kong’s independent regulator of listed entity auditors. All auditors intending to carry out a PIE engagement are subject to a system of registration (for Hong Kong auditors) and recognition (for non-Hong Kong auditors). A non-Hong Kong auditor is required to be recognized by the FRC before the auditor can (i) “undertake” (i.e. accept an appointment to carry out) any PIE engagement; and (ii) carry out any PIE engagement for an overseas entity.

Non-Hong Kong auditors recognised by the FRC are contained in the Register of PIE Auditors maintained by the Hong Kong Institute of Certified Public Accountants.

Further details of the recognition of overseas auditors including the meaning of “PIE engagement” are set out in the Recognition of Overseas Auditors Policy Statement​.

Recognition of Overseas Auditors (not including those in Mainland China)​

An application for the recognition of an overseas auditor ​should be made by the overseas entity intending to appoint the overseas auditor to carry out a PIE engagement. The overseas entity should coordinate with the proposed overseas auditor for the submission of the application forms. For details of the procedures and eligibility requirements of the application and renewal of recognition of overseas auditors, please refer to Recognition of Overseas Auditors – Application and Renewal Procedures​.

Application forms can be downloaded at Useful Forms .

Transitional Arrangement

Section 90 of the FRCO sets out the following transitional arrangement which is applicable to an overseas auditor who has accepted an appointment to carry out a PIE engagement for an overseas entity but not yet completed such engagement before 1 October 2019.

  • The overseas auditor intending to continue to carry out the PIE engagement for the overseas entity should inform the FRC of such intention by written notice in a specified form, (i.e. Transitional Arrangement – Application Form), thereby becoming a recognized PIE auditor (provisional).
  • The overseas entity is required to make an application for its overseas auditor with the FRC no later than 45 days before 31 December 2019 (i.e. 16 November 2019) if it expects the PIE engagement could not be completed by 31 December 2019 and/or intends the appointment of the overseas auditor to continue beyond 31 December 2019. If such an application is made, the provisional recognition will continue until the application is determined by the FRC (which may be after 31 December 2019).

If an overseas auditor has not accepted an appointment to carry out a PIE engagement for an overseas entity but is expected to do so after 1 October 2019, the overseas entity is strongly encouraged to make an application for the recognition of its overseas auditor with the FRC 45 business days before it appoints the overseas auditor to allow for sufficient time for the FRC to consider the application.

If you have any questions relating to the recognition of overseas auditors, please refer to Frequently Asked Questions ​ or contact us by:

Email: recognition@frc.org.hk
Tel: +852 2810 6321
Fax: +852 2810 6320

Recognition of Auditors in Mainland China

As from 1 October 2019, an auditor who has been endorsed as being qualified to act as the auditor for a corporation incorporated in Mainland China and listed in Hong Kong under the mutual recognition agreement between Mainland China and the Hong Kong SAR (the Mutual Recognition Agreement), will be recognized as a PIE auditor without a recognition application being made to the FRC.

The recognition is valid as long as the Mutual Recognition Agreement is in force and the endorsement under the Mutual Recognition Agreement has not been withdrawn. The auditor may carry out any PIE engagements for a corporation incorporated in Mainland China and listed in Hong Kong and must carry them out in accordance with the China Accounting Standards for Business Enterprises or the Mainland Auditing Standards.​​​​​​​​​​