Members’ Handbook highlights
Handbook Update No. 324 relates to the publication of Hong Kong Standard on Sustainability Assurance (HKSSA) 5000, which is the equivalent of International Standard on Sustainability Assurance (ISSA) 5000 issued by the International Auditing and Assurance Standards Board (IAASB). HKSSA 5000 is an overarching standard that outlines requirements and application material for all elements of a sustainability assurance engagement. It provides a robust framework that supports the consistent performance of quality sustainability assurance engagements, aiming to enhance the reliability and transparency of disclosed information. The key impacts document provides an overview of the standard and addresses major local stakeholders’ comments gathered during the consultation of ISSA 5000.
Handbook Update No. 323 revises Practice Note (PN) 860.1 (Revised) The Audit of Retirement Schemes in Volume III. It is updated to address the implementation of eMPF as a result of the amended Mandatory Provident Fund (MPF) Schemes Ordinance and relevant guidelines. The updated PN is effective for reporting periods ended on or after 31 December 2024. It is only applicable for MPF schemes which have completed onboarding the eMPF Platform. The extant PN remains applicable for MPF schemes which have not joined the eMPF Platform.
Handbook Update No. 322 relates to the issuance of Contracts Referencing Nature-dependent Electricity (Amendments to HKFRS 9 Financial Instruments and HKFRS 7 Financial Instruments: Disclosures). The key areas of the amendments include:
- Clarifying the application of the “own-use” requirements;
- Permitting hedge accounting if nature-dependent electricity contracts are used as hedging instruments; and
- Adding new disclosure requirements to enable investors to understand the effect of these contracts on a company’s financial performance and cash flows.
The amendments will become effective for annual reporting periods beginning on or after 1 January 2026. Earlier application of the amendments is permitted.
Financial reporting
Institute submission
The Institute has submitted its comment letter on the International Accounting Standards Board (IASB) Exposure Draft Provisions – Targeted Improvements.
Educational publication
The Institute has issued the educational publication Financial Reporting Considerations for Closing Out 2024. This publication aims to provide preparers with key reminders and insights for preparing their 2024 annual financial statements in accordance with HKFRS Accounting Standards. It covers topical financial reporting issues, and highlights major new and amended HKFRS Accounting Standards that will become effective after 2025.
Auditing and assurance
Institute submission
The Institute has submitted its comment letter on the IAASB Post-Exposure Consultation: Invitation to Comment Before the IAASB Finalizes the Narrow Scope Amendments to the ISQMs and ISAs as a Result of the Revisions to the Definitions of Listed Entity and Public Interest Entity in the IESBA Code.
Technical Bulletin: Determining the appropriateness of the auditor’s reporting framework
The Institute’s recently issued Technical Bulletin AATB 7 aims to help practitioners determine an appropriate reporting framework for engagements other than audits or reviews of financial statements. The guidance also assists intended users of the practitioner’s report in understanding the purposes of different types of auditor reporting, thereby addressing specific needs, such as regulatory obligations.
ISSA 5000 and IESSA global baseline standards for sustainability assurance
The IAASB and the International Ethics Standards Board for Accountants (IESBA) have launched an integrated effort to support effective implementation of their landmark standards in sustainability reporting and assurance:
- ISSA 5000 provides a principles-based framework for conducting assurance engagements on sustainability information reported by entities.
- International Ethics Standards for Sustainability Assurance (including International Independence Standards) (IESSA), the provisions related to sustainability reporting, and the new standards addressing using the work of an external expert in the International Code of Ethics for Professional Accountants (including International Independence Standards), establish a strong ethical foundation for sustainability reporting and assurance engagements.
Visit the joint IAASB and IESBA webpage for more information. In jurisdictions adopting the standards, both ISSA 5000 and IESSA will become effective for periods starting on or after 15 December 2026, with early adoption permitted and encouraged. The Institute will follow its due process for the convergence and adoption of these standards.
Updated circular for the New Capital Investment Entrant Scheme
In January, the Financial Services and the Treasury Bureau and Invest Hong Kong announced the details of various enhancement measures for the New Capital Investment Entrant Scheme, set to take effect from 1 March 2025. Consequently, the Institute has updated Circular on Reporting under Rule 4.2 and Rule 4.4 relating to Net Asset Requirement and Rule 4.6 relating to Investment Requirements of the New Capital Investment Entrant Scheme to reflect the revised requirements.
Reminders for Auditors’ Reporting on Licensed Corporations
The Accounting and Financial Reporting Council has published the Checkpoint – Reminders for Auditors’ Reporting on Licensed Corporations, which provides an overview of their 2024 inspection findings relating to licensed corporation (LC) audits and assurance engagements. This publication identifies ongoing audit quality concerns and recommends good practices to improve quality of work, along with key emerging risks and opportunities for LC auditors.
IAASB publication on first-time implementation guide for the ISA for LCE
The IAASB has released the First-Time Implementation Guide for the ISA for LCE. This guide provides an overview of the International Standard on Auditing for Audits of Financial Statements of Less Complex Entities (ISA for LCE) concepts, structure and format. It offers step-by-step insights into each part of the standard with examples and comparisons to other ISAs, equipping auditors with the tools needed for effective implementation of the ISA for LCE.
IFIAR publication on use of technology in the audit
The International Forum of Independent Audit Regulators (IFIAR) 2025 report on Use of technology in audits – observations, risks and further evolution highlights findings related to the use of automated tools and techniques observed in IFIAR Member inspections .The report includes key messages arising from discussions with the Global Public Policy Committee networks.
Ethics
Invitation to comment
The Institute is seeking comments on the IESBA Consultation Paper: Collective Investment Vehicles and Pension Funds by 30 May. The consultation seeks views on auditor independence matters pertaining to audits of Investment Schemes when these Schemes involve external parties. It also aims to inform the IESBA’s consideration of whether its International Independence Standards are sufficiently clear and fit for purpose for such audits.
Sustainability
GAA guide on nature matters for accountants
This Global Accounting Alliance (GAA) guide, Why nature matters to accountants, provides accountants working in business and practice with foundational knowledge and practical actions to begin integrating nature into their work. It explores the financial impact of nature-related issues and includes real-world case studies showcasing best practices, along with a list of resources.
New webcast series – Sustainability-related risks and opportunities and the disclosure of material information
In November 2024, the IFRS Foundation published a guide to help companies in identifying and disclosing material information about sustainability-related risks and opportunities that could reasonably be expected to affect their cash flows, access to finance or cost of capital over the short, medium or long term. To provide further support, the IFRS Foundation has launched a new webcast series to explain:
- The definition of material information and its application in the International Sustainability Standards Board Standards;
- The meaning of “sustainability-related risks and opportunities that could reasonably be expected to affect an entity’s prospects”, and how to identify such risks and opportunities; and
- How to identify and disclose material information about these risks and opportunities.
Insolvency
INSOL Hong Kong 2025
INSOL International, the global association for restructuring, insolvency bankruptcy professionals, held its major international conference on 17-19 March in Hong Kong, marking the first time the event has been held in the city since 2014. The conference, which was co-chaired by a member of the Institute’s Restructuring and Insolvency Faculty Executive Committee, reached its capacity of 700 participants well ahead of time. In addition to the main conference, a number of related ancillary event were held at the same location, including a member associations’ meetings attended by Institute representatives, the seventh INSOL/World Bank Group Legislative & Regulatory Colloquium, financiers and judicial roundtable meetings, and an offshore meeting.
Bankruptcy and Companies Legislation (Miscellaneous Amendments) Ordinance 2023 (Commencement) Notice 2025
The Official Receiver’s Office (ORO) has issued a letter for the attention of insolvency practitioners (IPs).
The letter reminds IPs that 14 July 2025 is designated for the commencement of all provisions of the Bankruptcy and Companies Legislation (Miscellaneous Amendments) Ordinance 2023 (Ordinance) that have not yet commenced. Part 2 of the Ordinance deals with amendments to the Bankruptcy Ordinance (Cap. 6), the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap. 32) and their subsidiary legislation relating to the electronic submission of certain documents to the Official Receiver. Please also refer to the press release for details.
ORO Circular No. 1/2025
The ORO has issued the above-captioned circular for the attention of liquidators, which supersedes Circular No. 3/2017. The main change is that, when liquidators submit their bill of costs to the ORO, along with a resolution passed by the committee of inspection (COI) confirming that the COI has been provided with the details prescribed in the circular, those details should now include “dates and names of respective grades of staff and the hours spent on the main activities of work performed” during the relevant period, rather than on a weekly basis as previously specified. This relaxation follows discussions between the ORO and the Institute’s Restructuring and Insolvency Faculty Executive Committee.
Please refer to the full versions of Technical News on the Institute’s website: www.hkicpa.org.hk
