This site uses cookies to provide you with a more responsive and personalised service. By using this site you agree to our use of cookies. Please read our cookie notice for more information on the cookies we use and how to delete or block them.
The full functionality of our site is not supported on your browser version, or you may have 'compatibility mode' selected. Please turn off compatibility mode, upgrade your browser to at least Internet Explorer 9, or try using another browser such as Google Chrome or Mozilla Firefox.

HK-PRC joint declarations on accounting and auditing standards

  • China Image

07 Dec 2007

The mainland Chinese and Hong Kong accounting and auditing standard setters have signed joint declarations regarding mutual recognition of their accounting and auditing standards.

Under the Joint Declaration on Accounting Standards (PDF 48k), the two parties agree:

  • That there are only two substantive differences between Hong Kong Financial Reporting Standards (HKFRSs, which are virtually identical to IFRSs) and the new Chinese Accounting Standards (CASs*) that went into effect in 2007. The differences involve related party disclosures and reversal of impairment losses.
  • That financial statements prepared using CASs, after adjustments for those two differences, 'should achieve substantially the same effect'.
  • To work to eliminate the two differences and to maintain ongoing convergence of their accounting standards.
  • To work to obtain mutual exemption from the relevant papers on the Hong Kong and Chinese CPA examinations.
  • To work obtain mutual acceptance of each other's accounting standards for purposes of securities listings. [Currently, mainland Chinese companies listed in Hong Kong must use either HKFRSs or IFRSs].

*CASs are also sometimes referred to as Accounting Standards for Business Enterprises or ASBEs
Under the Joint Declaration on Auditing Standards (PDF 44k), the two parties agree:

  • That a CPA applying either Chinese or Hong Kong auditing standards will be complying with the same requirements and, therefore, should reach the same conclusions for assurance or other related services engagements, including audits of financial statements.
  • To maintain ongoing convergence of their auditing standards.
  • To work to obtain mutual exemption from the accounting papers on the Hong Kong and Chinese CPA examinations.
  • To work obtain mutual acceptance of each other's auditing standards for purposes of securities listings.

Related Topics

Correction list for hyphenation

These words serve as exceptions. Once entered, they are only hyphenated at the specified hyphenation points. Each word should be on a separate line.