Source: Hong Kong Government special administrative region – 4
Following is the speech by the Financial Secretary, Mr Paul Chan, at the Accounting and Financial Reporting Council Regional Regulatory Forum 2025 today (November 10):
(Vice Minister of the Ministry of Finance, Ms Guo Tingting), (Secretary-General of the Liaison Office of the Central People’s Government in the Hong Kong Special Administrative Region, Mr Wang Songmiao), David (Chairman of the Accounting and Financial Reporting Council (AFRC), Dr David Sun), Janey (Chief Executive Officer of the AFRC, Ms Janey Lai), distinguished guests, ladies and gentlemen,
Good morning. I am delighted to join the AFRC Regional Regulatory Forum. This second edition has brought together some 400 participants – regulators, industry leaders and academics – from across nine economies. To those who have travelled from abroad, a very warm welcome to Hong Kong. We treasure your participation, and look forward to meaningful exchanges of perspectives and regulatory collaboration.
The theme of the forum today, “Accounting for the Future”, carries a clever dual meaning: What lies ahead for the accounting profession? And how must the profession evolve to truly account for the future?
We are living through a time of profound transformation in which the accounting profession is being reshaped. Technological advancement, especially artificial intelligence (AI), transforms the work and value of accountants. Meanwhile, the growing global focus on sustainability is expanding the remit of audit and assurance. How can we embrace AI and ensure the integrity of AI-assisted processes? And how can we ensure the relevance and credibility of sustainability reporting?
Hong Kong’s path
As an international financial and business centre, Hong Kong must be at the forefront of these developments. And a world-class financial hub must be built on the highest standards of professional integrity too. These are vital for capital to flow with confidence, for markets to function effectively, and for economic activity to flourish.
For Hong Kong, there is an additional dimension amid today’s evolving geoeconomic landscape. That is our role to connect China with the world and to serve as a two-way platform for capital and businesses. The recent Fourth Plenary Session of the CPC Central Committee laid out China’s development roadmap under the upcoming 15th Five-Year Plan, reaffirming the country’s commitment to high-level, two-way opening up. In essence, China is welcoming more investments and foreign businesses into the country, and at the same time, encouraging Mainland enterprises to go global to reconfigure their supply chain and industry chain, as well as deepen international industrial collaboration.
Many of these Mainland enterprises are choosing to “go global” through Hong Kong. They are leveraging our full suite of financial and professional services, from trade finance, supply chain and treasury management, to cross-border tax advisory and ESG (environmental, social and governance) consulting. This growing momentum is reflected in our capital markets. Hong Kong currently leads the world in IPO (initial public offering) fund raising, and there are over 300 companies in the pipeline waiting to be listed on our Stock Exchange.
In this context, Hong Kong is not just a “super connector” but also a “super value-adder”. We play a vital bridging role, helping Mainland enterprises connect with international markets and converge Mainland standards with the global ones. Our professional services sector will help them navigate increasingly complex regulatory environments, and communicate with global investors and other stakeholders, for example in the areas of financial reporting, corporate governance and sustainability.
Ladies and gentlemen, all these developments are placing higher expectations on our accounting and auditing professionals – demanding an unwavering commitment to the highest standards, uncompromising professional integrity, a heightened sense of social responsibility, and greater versatility in skills and expertise.
I’m pleased to note that our industry and regulator are working together to advance the development of the profession. In Hong Kong, regulators are enablers of progress and innovation. As David eloquently illustrated with the “chopsticks principle”, the AFRC has a dual mandate of prudent regulation and market development facilitation.
Allow me to supplement two points. First, the philosophy of promoting regulation and development side by side is a core and unique strength of our regulation. Regulators are required to maintain close engagement with stakeholders, and address their challenges and pain points while staying alert to emerging growth opportunities.
Second, about policy co-ordination. As you know, we do not adopt a single super-regulator approach. Each sector has its own regulator, for example, the HKMA (Hong Kong Monetary Authority) for the banks and the SFC (Securities and Futures Commission) for the securities brokers. But we have established a co-ordination mechanism that regularly brings regulators together to share market insights and intelligence, and to address cross-sectoral issues or emerging issues that may not readily fall onto the shoulder of a particular regulator. This mechanism ensures that our regulatory frameworks remain agile, forward-looking and responsive to market situations, and facilitate market innovation.
On the global stage, when it comes to regulation, Hong Kong has always been at the forefront of international best practices. But we do more than just that – we also contribute. We take part in various international committees and contribute our perspectives and experiences in standard setting, education and capacity building. For example, in the area of sustainability reporting, the CEO of the SFC co-chairs the IOSCO (International Organization of Securities Commissions) Sustainable Finance Task Force’s Workstream on Corporate Reporting, which plays a pivotal role in the development and implementation of the ISSB (International Sustainability Standards Board) disclosure standards.
Embracing the future: sustainability, AI and talent
Looking ahead, the accounting profession in the region must rise to the challenges of today and tomorrow, and capture the opportunities arising. Three issues stand out: sustainability, technology and talent.
First, sustainability. While the US (United States) is rolling back its climate commitments, many others – including China – are moving full steam ahead. In Hong Kong, we remain firmly committed to achieving carbon neutrality by 2050, by a multipronged strategy: net-zero electricity generation, green buildings, green transport and waste reduction.
And our accounting profession is making significant strides in advancing sustainability reporting. With the ISSB now setting a global baseline for corporate disclosure, Hong Kong is moving decisively in the same direction. In December last year, we launched Hong Kong’s Roadmap on Sustainability Disclosure, setting a clear path for large publicly accountable entities to fully adopt the ISSB standards by 2028. In June, the IFRS (International Financial Reporting Standards Foundation) recognised us as one of the first jurisdictions with a clear and credible roadmap.
The AFRC’s upcoming public consultation on a local sustainability assurance framework marks another important step forward.
Second, technology, particularly AI. The Hong Kong SAR (Special Administrative Region) Government embraces AI and is driving its advancement through a twin-engine strategy: developing AI as a core industry, and promoting “AI+”, i.e. AI as an enabler to upgrade and transform traditional sectors.
The transformative power of AI is formidable. It brings tremendous potential, but at the same time, its use must be matched with a strong sense of responsibility. That’s why we are building strong governance frameworks for the responsible adoption of AI.
In financial services, we have issued a policy statement on the ethical use of AI. For the accounting profession in particular, the AFRC will assess the emerging opportunities and potential risks associated with the use of AI by audit firms. Guidance will be developed to enhance awareness and support AI deployment.
Finally, talent. While the accounting profession is evolving rapidly, one truth remains unchanged – and has become even more vital: its future success depends on people.
Like many jurisdictions around the world, Hong Kong faces a persistent shortage of accounting talent. To address this, the AFRC and HKICPA (Hong Kong Institute of Certified Public Accountants) are working closely with academic and professional institutions on a number of education and professional development initiatives. And as a stop-gap measure, we welcome talent from outside Hong Kong to join us. In March this year, we included accounting professionals in our Talent List to make it easier for qualified non-local accountants to come to work in Hong Kong.
Over the longer term, we will continue to invest in building a vibrant future for the accounting profession, providing practitioners with continuous upskilling to further enhance their strategic and advisory capabilities. This will help them better seize the opportunities on the horizon.
Fellow accountants and friends, just as crucial is work-life balance. Let’s also work to cultivate a culture that supports sustainable, fulfilling career paths, making the profession more attractive and rewarding for the next generation.
Concluding remarks
Ladies and gentlemen, in answering the questions for “Accounting for the Future”, perhaps I can borrow a quote from Mahatma Gandhi: “The future depends on what you do today.”
Hong Kong stands ready to work with you all today – to shape that future together.
I wish you a successful and inspiring Forum, and continued good health and business in the time ahead. Thank you.