Hongkong Society Of Accountants: AH Share Statement Consolidated Demand

Since the mainland and Hongkong are equivalent to the accounting auditing standards, mainland enterprises with A+H shares are listed on the same audit report. However, the market is worried that Hong Kong has no right to supervise the conduct of mainland auditors, which makes the supervision of financial and internal governance of mainland listed companies lose the last barrier and jeopardize the interests of investors. Zhang Zhiyuan, chief executive officer of the Hongkong society of accountants, said that the key to the unification of A and H-share financial reports is the equivalence of the two auditors' supervisory system. The association, as a local audit institution of Hong Kong auditors, can be responsible for the comparison of the regulatory systems between the two places, but it needs to be authorized and supported by the HKEx (0388).

According to the Listing Rules of HKEx, the financial statements of Listed Companies in Hong Kong must be audited by local certified auditors or internationally reputable auditors. Zhang Zhiyuan pointed out that the core issue of the unification of AH share statements is whether the HKEx can accept the audit reports of mainland listed companies from mainland auditors, such as HSBC Holdings (0005) and Standard Chartered Bank (2888), which can be signed by overseas auditors.

There are different regulatory powers.

Zhang Zhiyuan disclosed that the Hong Kong Stock Exchange's fashionable worry is the difference in supervision between the two places. She pointed out that the Hong Kong Association, as a regulator of Hong Kong's audit industry, has good field experience to maintain market quality, and has successfully promoted the equivalent of the two accounting and auditing standards. The guild can be responsible for the differences in auditing supervision systems between the two places, and negotiate with China's Ministry of finance to improve the relevant system. It is expected that the comparison of the relevant systems will not take one year.

However, the CPA needs to be "well-known". Zhang Zhiyuan pointed out that the HKAC's existing HKAC has been awarded the Commission's responsibilities according to the listing rules, and has begun to audit the comparison of the regulatory system. For the earlier media reports, the association will send the staff to the pilot accounting firms to inspect the AH shares' unified audit reports in the mainland, and the AH share statements will be unified soon. She clarified that the association would not supervise the power of the mainland auditor, nor would it be able to review the mainland accounting firms in the field, and would only engage in institutional comparison and improvement in the future.

There is little difference between the two reports.

She continued to point out that the mainland enterprises' request for only one audit report is actually a reasonable request. After 07 years' equivalence of the two accounting auditing standards, the Ministry of finance of China analyzed 57 A+H shares' 07 year reports, and found that the difference was only 3-4% of assets and profits. The difference was mainly due to the historical left over problems caused by the different ways of handling the individual projects by the two standards, and the A+ H-share companies after the adoption of the new accounting standards in the mainland had no problem of earnings difference.