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Financial Crime Investigations and Forensics in Hong Kong: A Growing Challenge

The fight against financial crime has become increasingly complex, with investigations conducted by Hong Kong forensic accountants expanding to accommodate the growth of cybercrime.

The Rising Tide of Financial Crimes

Financial crimes plague economies worldwide, and the task of fighting digital fraud has become more challenging. According to Carmen Chu, executive director (enforcement and AML) at the Hong Kong Monetary Authority, “Deception cases reported to the Hong Kong Police Force have more than tripled in recent years, with similar increases in financial losses to victims.”

Key Statistics:

• Deception cases reported to the Hong Kong Police Force have more than tripled in recent years
• Financial losses to victims have increased significantly
• The number of investment scams in Hong Kong has doubled to 2,850 in 2022 from just over 1,500 in 2021

Collaboration and Talent Development

To address the growing need for financial forensic professionals, the collaboration between the HKPF’s Financial Intelligence and Investigation Bureau and the Institute of Singapore Chartered Accountants (ISCA) has signed a memorandum of understanding to advance the development of financial forensics. This includes:

• Providing specialized training in forensic accounting and investigation
• Combating financial crime
• Developing professional ethics

However, there is concern that a lack of regulation around forensic accounting work means that companies are using the services of law firms and individual practitioners instead of recognized CPA firms.

Regulation and Talent Development

To develop and retain a pipeline of forensic accounting talent, larger CPA firms are investing in younger staff, placing emphasis on e-discovery work, and creating pathways for them to grow to partners. This includes:

• Investing in younger staff
• Creating pathways for staff to grow to partners
• Placing emphasis on e-discovery work

The Future of Financial Forensics

As the demand for forensic accountants is likely to remain high for the foreseeable future, it is essential that the industry continues to develop and retain a pipeline of talented professionals. With the rapid growth of complex corporate activities around the region, the need for sophisticated financial forensics skills will only continue to increase.

By recognizing the importance of regulation and talent development, Hong Kong can position itself as a leader in financial crime investigations and forensics, and continue to combat the growing threat of cybercrime.