What does FRSP mean in GENERAL

The Financial Reporting Surveillance Programme (FRSP) is a compliance monitoring framework established by the Hong Kong Institute of Certified Public Accountants to ensure that members comply with their professional and regulatory responsibilities in the preparation, review and audit of financial statements. It promotes public confidence in the accuracy and fairness of financial reports issued by listed companies.

The primary objective of the FRSP is to identify, assess and resolve any potential or actual misstatements in listed companies' financial reports. This means developing better control systems, cautioning against manipulation and omissions, ensuring compliance with accounting standards and identifying weaknesses in internal controls or other areas falling within the scope of a CPA’s duties.

The Financial Reporting Surveillance Panel (FRSP) was established by the Hong Kong Institute of Certified Public Accountants (HKICPA) on behalf of its members who are involved in preparing, reviewing and auditing financial statements. It aims to enhance the quality assurance process for listed companies’ financial reports.

Yes, CPA firms registered with HKICPA are required to participate in periodic reviews conducted under the FRSP scheme as part of their ongoing professional practice obligations. Firms must commit sufficient resources and employ appropriate procedures to ensure compliance with applicable accounting standards.

Yes, an extensive set of guidelines has been developed specifically for reviews conducted under FRSP. These provide specific requirements regarding scope, quality control procedures, due consideration and communication between parties involved in the review process. Furthermore, they also offer best practice guidance on areas such as substantive testing policies and risk assessment methodology.

Stakeholders such as shareholders have a vested interest in understanding how accurately published accounts reflect material transactions and events within a company. As such, participating in an independent review conducted under a standardised system should provide them with more certainty about the accuracy and reliability of reported figures.

External reviews should be conducted at least once every three years or after any significant changes within a company's operations. A selection criteria for clients has been developed by HKICPA which includes factors such as size nature complexity etc which can trigger an earlier review if deemed necessary.

Participation in this compliance scheme does not guarantee absolute accuracy but rather provides stakeholders with increased assurance that reasonable steps have been taken to protect against material misstatements or omissions from occurring within published accounts.