What is the difference between AFRC and HKICPA for auditors?
Since 1 October 2022 the AFRC licenses and disciplines audit firms and practising accountants, inspects practice units and oversees HKICPA. HKICPA still registers CPAs, runs the qualification and CPD, and sets accounting, auditing and ethics standards.
AFRC (Accounting and Financial Reporting Council)
- Issues and renews practising certificates.
- Registers practice units (CPA firms, corporate practices) and public interest entity (PIE) auditors.
- Inspects practice units, including their quality management and compliance with anti-money laundering and counter-terrorist financing requirements.
- Investigates and disciplines CPAs and practice units.
- Oversees how HKICPA does its statutory functions.
HKICPA (Hong Kong Institute of Certified Public Accountants)
- Remains the registration authority for CPAs, runs the CPA qualification and continuing professional development.
- Continues to set professional standards, including auditing standards (HKSAs) and the Code of Ethics, with AFRC oversight.
Timeline HKICPA's page says that as of 1 October 2022, its registration functions for practising certificates and practice units moved to AFRC. AFRC's own history page dates an earlier step, 1 October 2019, when the body gained inspection and investigation powers over auditors of listed entities; the 2021 amendments renamed it AFRC.
For a business owner If you have a complaint or need to verify a firm, AFRC is the contact for practice units. Questions on technical accounting or auditing standards usually go to HKICPA.
Legal basis
- Financial Reporting Council Ordinance (Cap. 588), as amended in 2021
- Professional Accountants Ordinance (Cap. 50)
Sources
Applies to 2026 · Last reviewed 29 October 2026
General information for business owners, not legal, tax or professional advice. Rules change, so check the sources or ask a licensed professional before you act.
Related questions
- Does every Hong Kong limited company need an audit?Yes. Every Hong Kong company must have an auditor for each financial year and its financial statements audited, whatever its size or whether it trades. The only company that escapes is a qualifying private company that has validly become dormant under s.5 and s.447 of the Companies Ordinance.
- Why does Hong Kong require even a small private company to be audited?Hong Kong's Companies Ordinance makes audit a universal requirement for companies, because an independent report on the accounts protects members, creditors, lenders and the tax authority. Small companies get simpler reporting rules, not an audit exemption.
- Do I still need an audit if my company had no revenue or no business activity?Yes, unless the company has formally become dormant. Having no sales does not make a company dormant in law. If it had any expenses, bank charges or other recorded transactions, the audit duty continues for that year.
- My company is loss-making. Do I still need to audit it?Yes. Profit or loss has no bearing on the audit requirement. A loss-making company is audited every year, and the auditor will also look closely at going concern.
- What is the dormant company audit exemption in Hong Kong?A qualifying private company that has become dormant under s.5 of the Companies Ordinance does not need to appoint an auditor or have its accounts audited while it stays dormant. The exemption is in s.447, not in s.448, which deals with false statements in reports.