Hong Kong Institute of Certified Accountants with 45,000 Members: Hong Kong & United States to End Mutual Audit Work Recognition for Professional Accountants on 31st December 2022
1st September 2022 | Hong Kong
The Hong Kong Institute of Certified Public Accountants (HKICPA) has announced Hong Kong & United States (US International Qualifications Appraisal Board, IQAB) will end mutual audit work recognition for Professional Accountants on the 31st of December 2022, first signed in 2011 and renewed in 2020. HKICPA: “In the past 3 years, the Institute has engaged in protracted negotiation with the IQAB for renewal of the MRA. The IQAB had insisted that the precondition to continue with the MRA was for the Institute to recognize audit experience obtained in the U.S. towards meeting the audit experience requirement for obtaining the practising certificate in Hong Kong. However, the Institute is unable to accept audit experience obtained in the U.S. as meeting the one-year recent local experience requirement stipulated by the Professional Accountants Ordinance. This local experience requirement is to ensure that overseas applicants are familiar with the local audit environment and relevant legal requirements and professional standards before they could perform audits in Hong Kong. As such, the MRA will not be renewed after 31 December 2022.” The Hong Kong Institute of Certified Accountants has 45,000 members. See background, implications & full announcement below.
“ Hong Kong Institute of Certified Accountants with 45,000 Members: Hong Kong & United States to End Mutual Audit Work Recognition for Professional Accountants on 31st December 2022 “
Hong Kong Institute of Certified Public Accountants: Non-renewal of MRA with US IQAB
The current mutual recognition agreement (“MRA”) between the Hong Kong Institute of Certified Public Accountants (the “Institute”) and the U.S. International Qualifications Appraisal Board (“IQAB”) will expire on 31 December 2022.
Background
In the past three years, the Institute has engaged in protracted negotiation with the IQAB for renewal of the MRA. The IQAB had insisted that the precondition to continue with the MRA was for the Institute to recognize audit experience obtained in the U.S. towards meeting the audit experience requirement for obtaining the practising certificate in Hong Kong. However, the Institute is unable to accept audit experience obtained in the U.S. as meeting the one-year recent local experience requirement stipulated by the Professional Accountants Ordinance. This local experience requirement is to ensure that overseas applicants are familiar with the local audit environment and relevant legal requirements and professional standards before they could perform audits in Hong Kong. As such, the MRA will not be renewed after 31 December 2022.
Implications
Members of the Institute who are eligible to become a member of the U.S. State Boards of Accountancy under the MRA would be encouraged to take advantage of the MRA before it expires on 31 December 2022. Arising from this non-renewal of the MRA, members of the U.S. State Boards of Accountancy will not be qualified to be registered as engagement quality control reviewers (“EQCR”) in Hong Kong after the MRA expires. Members of the U.S. State Boards of Accountancy who wish to continue to be a registered EQCR of Public Interest Entities Auditors may apply for registration as a CPA with the Institute provided that they meet all the conditions in the MRA on or before 31 December 2022. Please refer to the full details of the conditions of the MRA.
Non-renewal of MRA with US IQAB
Regarding the non-renewal of the current mutual recognition agreement (MRA) between the Hong Kong Institute of Certified Public Accountants (the Institute) and the U.S. International Qualifications Appraisal Board (IQAB), which will expire on 31 December 2022, the Institute would like to supplement and clarify as below:
- The Institute currently has various MRAs with member bodies of the Global Accounting Alliance (GAA) and other accountancy bodies. These agreements cover the mutual recognition of members’ professional qualifications between the Institute and its counterparts and full or partial exemption of membership admission requirements. All MRAs signed require overseas applicants to have one year of local (Hong Kong) experience in order to obtain a practising certificate in Hong Kong.
- The requirement for IQAB accountants to have one year of local experience in order to obtain a practising certificate in Hong Kong has been part of the MRA in question since it came into effect in 2011. Applicants have not been allowed to replace locally obtained experience with audit experience in the U.S in the past. Those who do not meet the requirement may become a non-practising member of the Institute until 31 December 2022. In the past three years, the Institute has engaged in protracted negotiations with the IQAB for renewal of the MRA, where the IQAB stated its desire for the Institute to recognize audit experience obtained in the U.S. towards meeting the one-year local experience requirement, allowing its members to obtain the practising certificate in Hong Kong on application, otherwise the MRA would not be renewed.
- This requirement for one year of local experience exists to ensure that overseas applicants are familiar with the local audit environment and relevant legal requirements in order to meet the necessary professional standards when performing audits in Hong Kong. In this relation, the Institute and IQAB could not come to an agreement, and therefore could not proceed on the renewal of the MRA.
關於香港會計師公會(公會)與U.S. International Qualifications Appraisal Board (“IQAB”)的互認協議，將於2022年12月31日到期之事宜。公會現補充及澄清如下：
- 公會現時與全球會計聯盟 (The Global Accounting Alliance (GAA)) 成員機構及其他專業會計機構簽署了互認協議，互認對方會員的專業資格／豁免部分登記條件。各互認協議均要求海外申請者需具備一年本地(香港)經驗，方可在香港成為執業會計師。
- IQAB會員需具備一年本地(香港)經驗才可成為本港執業會計師的條件，自公會與IQAB的協議於2011年生效已存在，過往申請人不能以在美國的經驗取代於香港的工作經驗。否則，只能成為公會的非執業會員。在過去三年期間，IQAB與公會就互認協議商討，希望美國的經驗可取代香港的本地經驗，讓IQAB會員直接成為香港執業會計師，否則協議將不會繼續。
- 惟要求IQAB會員需具備一年本地(香港)經驗的條件，是為了確保海外申請者在香港從事審計工作時，了解香港相關法規的要求及達致一定專業水平，因此公會與 IQAB 未能達成共識以延長雙方的互認協議。
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