************************************************************
Following is the speech by the Permanent Secretary for Financial Services and the Treasury (Financial Services), Miss Au King-chi, at the Hong Kong Institute of Certified Public Accountants (HKICPA) Annual Award and Graduation Dinner 2012 this evening (November 2):
Keith (Pogson), Raphael (Ding), distinguished guests, graduates, ladies and gentlemen,
Good evening. It gives me great pleasure to be with you and share the joy and excitement of the 1,500 (1,490 to be exact) young graduates who have successfully attained the Certified Public Accountants qualification. From now on you can proudly decorate your names with the highly regarded acronym: CPA. My warmest congratulations to all graduates and award-winners!
The Qualification Programme is a highly challenging programme that requires tremendous hard work, dedication, determination and, I'm sure, countless sleepless nights. No doubt your presence tonight is the highlight of your journey in equipping yourselves with the essential qualities required of a CPA. Well done indeed!
Graduation marks the commencement of another long journey. The qualification presents enormous opportunities for you to engage in different disciplines of the accounting profession - accounting services, auditing, taxation, advisory, insolvency, just to name a few - and to serve the corporate world and non-profit institutions.
Whatever your pursuit, I would like to share with you what a wise man (Sir Charles Lyell) once said. I quote, "A good accountant is a debit to his profession." End quote. I don't need to elaborate on what "credit" would stand for in this case, you know better than I do. Being a good professional means more than the possession of technical competence. In my view, what makes a professional different are the following core values: the endless quest for excellence, the uncompromising determination to uphold high ethical standards and a strong sense of public accountability. Like it or not, what each of you does will add up to form the perception of others about the accounting profession.
Users of financial statements rely heavily on the work of accountants. Starting from the construction of a proper financial reporting system and a sound internal control system in a corporation, you assist in setting up the right mechanism to fully capture a company's operation in monetary terms, down to every single cent. When you perform the role of an auditor, you provide an independent view on the truthfulness and fairness of a company's financial statements. This is important for shareholders and other users of the information to form an informed view of the company's health.
Accountants also play an important part in enhancing our corporate governance. By ensuring the provision of timely and accurate financial information about a company, you are doing a great deal to promote the transparency of a company's operation and hence its accountability to shareholders, investors and creditors. For companies that are more sizable and have a higher level of public significance, more newly developed accounting methods such as integrated reporting bring in the additional dimension of environmental and social sustainability. This would go a long way towards promoting corporate citizenship, and providing a more concrete framework for business leaders to take into account the social impact of their decisions.
Maintaining a high standard of corporate governance is getting more important and, indeed, more challenging when the global economy is undergoing some rather difficult times. The Eurozone debt crisis, the fiscal cliff in the US, and the economic slow-down in the emerging markets all spell worrying signs for Hong Kong. As Warren Buffet rightly put it, "It is only when the tide goes out that you get to see who has been swimming naked." Accountants have to remain vigilant in performing their duties and sound the alarm bell on a timely basis.
Yet downside risks also have their upside. They keep us awake and prompt us to take the necessary preventive measures. Over the past few years, the Government and the financial regulators introduced regulatory measures and legislative amendments to ensure market stability, enhance market quality and improve investor protection. These are useful tools to cushion us from financial crises that may come our way. At the same time, they also help improve our financial infrastructure to support the long-term, sustainable growth of our financial services.
For the current LegCo term, we have formulated a substantial reform programme to modernise our regulatory regime for meeting evolving market needs and aligning with the G20 agenda. These reform measures are instrumental for promoting market development. In the coming few months we will introduce legislative initiatives to facilitate Islamic finance, modernise trust law and implement the newly enacted Companies Ordinance. We are conducting public consultation on the establishment of an independent insurance authority, and will engage the market on the reform of the insolvency law. Another initiative that is close to the accounting profession is a review of our auditor oversight regime for the listed sector to keep up with international standards and best practice.
When we take forward these reform measures, we have to count on the accounting profession to give us your assessment and advice on how they might affect the market and how to facilitate compliance. Your input will shape these measures. Specifically, on the auditor oversight review, we will fully engage the HKICPA and the profession in formulating the direction of changes in the best interests of Hong Kong.
At the same time, we are working at full swing to implement the basket of measures announced by the Central People's Government to enhance Hong Kong's status as an international financial centre, an asset management centre and an off-shore Renminbi business centre. Also, we are supporting the preparatory task force appointed by the Chief Executive to prepare a blueprint for setting up a Financial Services Development Council, as pledged in his election manifesto.
Talking about development, accountants in Hong Kong have more opportunities than your peers in many other parts of the world. We are at the very centre of economic growth, without the imminent threat of any sovereign debt crisis or fiscal cliff. When you chart your career path, try to cast your sight beyond Hong Kong. Indeed Hong Kong's continued success will rely on a talent pool that offers both international exposure and Mainland experience.
We see great potential in other regional markets for Hong Kong service providers including professional accountants. The Government will endeavour to open up more market opportunities for our accountants. In the Mainland context, we have been pursuing liberalisation of the accounting sector through CEPA (Closer Economic Partnership Arrangement). In the latest round of CEPA IX, we streamlined the procedures for Hong Kong accountants to engage in temporary practice in the Mainland. We also achieved a major breakthrough by allowing Hong Kong accountants who have obtained the CICPA (Chinese Institute of Certified Public Accountants) qualification to become partners in accounting firms set up in Qianhai, Shenzhen. This is a pilot scheme and we hope with its successful implementation it will be further expanded to other cities on the Mainland. So if I may offer a word of encouragement: try to crack the CICPA exams while you are still young and the opportunity costs still relatively low. Make best use of the slack season, if there is any.
Graduates, you are blessed with opportunities. To give is a great virtue. I appeal to you to make good use of your professional knowledge and consider offering pro bono services to non-government organisations (NGOs) in your spare time. From my personal experience, our NGOs are grateful to many public-minded professionals who help them deliver voluntary services to the community. I have no doubt that our accounting professionals are willing to give them a hand. Indeed, credits must go to many accountants who give their hearts and minds to the less privileged. I look forward to seeing more of you follow their example and make Hong Kong a better place for our fellow citizens.
Ladies and gentlemen, before I finish I would like to commend the accounting profession for doing an excellent job in upholding Hong Kong's status as a world financial hub and winning the confidence and trust of market participants. I hope all graduates here tonight will take over the torch from your predecessors, maintain a high standard of professionalism as you advance, and pass on the good virtues to the many generations to come.
Once again, my warmest congratulations to all graduates on your accomplishments, and my best wishes for a rewarding career ahead.
For tonight, be a true CPA - I mean a Certified Party Animal - and celebrate!
Thank you.
Ends/Friday, November 2, 2012
Issued at HKT 20:12
NNNN
