Institute welcomes GAA tax leaders
This month, the Institute welcomed members of the Global Accounting Alliance Tax Directors Group to Hong Kong for two days of meetings with representatives from the city’s accounting profession and government before the group headed to Beijing.
The group included Takae Akatsuka, Technical Director of International Tax Committee, at the Japanese Institute of Certified Public Accountants; Bruce Ball, Vice-President, Taxation, at CPA Canada; John Cuthbertson, Tax Leader, New Zealand, at Chartered Accountants Australia and New Zealand; Pieter Faber, Senior Executive, Tax Legislation and Practitioners at the South African Institute of Chartered Accountants; Edward Karl, Vice-President, Taxation, at the American Institute of CPAs; Brian Keegan, Director of Public Policy and Taxation at Chartered Accountants Ireland; Peter Tisman, Director of Advocacy and Practice Development at the Hong Kong Institute of CPAs; and Ian Young, Technical Manager at the Institute of Chartered Accountants in England and Wales.
They discussed topics such as local tax policy and administration, including transfer pricing, the development of the Belt and Road and the Greater Bay Area initiatives, and the new Mainland individual income tax regime. They also met with the Legislative Council Functional Constituency – Accountancy member, Kenneth Leung. They also sat down with A Plus and discussed global taxation issues. Read the roundtable article here.
Institute strengthens ties with the Beijing Institute of CPAs
On 27 March, Institute President Patrick Law and the Institute’s senior leadership welcomed a 10-person delegation from the Beijing Institute of CPAs to Hong Kong to develop a strategic alliance with them. The parties signed a memorandum of understanding on closer collaboration for joint talent development, technical exchange and member support in Hong Kong and the Mainland, witnessed by representatives from the membership of both bodies.
Annual meeting with the MoF
President Patrick Law hosted a delegation from the Central government’s Ministry of Finance led by Dr. Li Yu Huan, Director General, Accounting Regulatory Department on 17 April. The Institute shared the current landscape of the accounting profession in Hong Kong including news about audit regulatory reform and the roll out of the new Qualification Programme. After this, participants exchanged views on the amendments to the Mainland CPA law as well as the implementation of Hong Kong Financial Reporting Standard 16 Leases.
Work placements sought for Yuen Long District secondary school students
The Hong Kong Coalition of Professional Services (HKCPS), of which the Institute is a member body, is looking for potential partners who are interested in offering two-week work placement opportunities for secondary school students from Yuen Long for its internship programme in July. The programme, now in its 11th year, aims to provide 200 to 300 placements to Form 5 students to help them broaden their horizons through learning about different professions in Hong Kong, and build their self-confidence. If you are interested in being a role model to teenage students, please complete and return the reply slip to HKCPS by 15 May.
Institute expands e-learning courses
A range of new courses has been added to the Institute’s list of e-learning courses. These include e-Manager – 41 courses on topics including business analysis, risk management, project management, derivatives, as well as information technology; e-Seminar – five Inland Revenue Department seminars on transfer pricing, completion of the 2018/19 profits tax return, and proposed enhanced tax deductions for certain expenditures incurred in research and development activities; and e-Series – three courses on corporate nance, corporate governance and taxation.
Seminar on securing jobs against AI
A seminar in May will explore how to develop new leadership and management capabilities in a digital era, and how to achieve a strategic partnership with artificial intelligence for career success. Members who are interested should enrol by 9 May on the Institute’s website.
Financial Controllership Programme returns
The Financial Controllership Programme, the Institute’s tailor-made practical training programme on the work involved as a financial controller and the skills a successful financial controller needs, will run from June to December. Over 16 days, participants will learn from experienced course directors and facilitators how to become effective financial controllers who add value as Accountants Plus in business.
Corporate finance series
The workshops of the corporate finance series take place from May to June. Participants will gain knowledge about the key financial decisions faced by organizations, the applications and practical issues in corporate financial management and their implications for accountants.
Council minutes
Minutes from the February Council meeting are now available for members to read. They can be found in the “Members’ area” of the Institute’s website.
Resolution by Agreement
Li Wing Yin, CPA (practising), Au Yiu Kwan, CPA (practising) and BDO Limited
Complaint: Failure or neglect by Li and BDO to observe, maintain or otherwise apply Hong Kong Standard on Auditing (HKSA) 230 Audit Documentation, and failure or neglect by Au to observe, maintain or otherwise apply HKSA 220 Quality Control for an Audit of Financial Statements.
BDO audited the consolidated financial statements of Rosan Resources Holdings Limited, a Hong Kong listed company, and its subsidiaries (collectively, group) for the year ended 31 December 2012 and expressed an unmodified auditor’s opinion. Li was the engagement director and Au was the engagement quality control reviewer.
The carrying amounts of goodwill, mining rights and other related assets pertaining to the group’s acquired coal mines were allocated to relevant cash generating units (CGUs) for impairment testing. Based on management’s estimates and assumptions, the group recognized impairment losses because the recoverable amounts of certain CGUs were lower than their carrying values. The respondents did not prepare sufficient audit documentation to record the audit procedures performed and evaluation made to support their agreement with management’s estimates and assumptions adopted in the valuations of the CGUs.
Regulatory action: In lieu of further proceedings, the Council concluded the following action should resolve the complaint:
- The respondents acknowledge the facts of the case and their non-compliance with the relevant professional standards;
- They be reprimanded; and
- They jointly pay an administrative penalty of HK$50,000 and costs of the Institute and the Financial Reporting Council (FRC) totalling HK$105,564.50.
Disciplinary finding
Wong Wang Hei, CPA (practising), Tsang Yiu Chung, CPA (practising), Lui Chi Wang, CPA (practising) and Deloitte Touche Tohmatsu
Complaint: Failure or neglect to observe, maintain or otherwise apply HKSA 450 Evaluation of Misstatements Identified during the Audit and the fundamental principle of Professional Competence and Due Care in sections 100.5 (c) and 130 of the Code of Ethics for Professional Accountants.
Deloitte audited the financial statements of a Hong Kong listed company, China Vision Media Group Limited (now known as Alibaba Pictures Group Limited) and its subsidiaries for the four years ended 31 December 2010 to 2013 and issued an unqualified opinion on each of those financial statements. Wong and Tsang were respectively the engagement partners of the 2010 and 2011 audits, and Lui was the engagement partner of the 2012 and 2013 audits.
The Institute received a referral from the FRC about irregularities in the audits of the above financial statements. Convertible bonds issued by the company in an acquisition exercise in 2010 were wrongly valued due to the use of incorrect currency exchange rates. This led to misstatements in goodwill, gain from disposal of subsidiaries, effective interest expenses and exchange differences in the financial statements for the four years. During the audits, Deloitte identified the misstatements which were clearly not trivial. However, Deloitte did not accumulate the misstatements and communicate them to the company’s management, nor did they request management to correct the misstatements or request written representation from management.
Decisions and reasons: All the respondents were reprimanded. The Disciplinary Committee further ordered Wong and Tsang to pay penalties of HK$60,000 each, Lui to pay a penalty of HK$80,000 and Deloitte to pay a penalty of HK$150,000. The respondents were ordered to jointly pay costs of the disciplinary proceedings and of the FRC totalling HK$121,867.70. When making its decision, the committee took into account the particulars of the breaches committed in this case, the parties’ submissions and the respondents’ conduct throughout the proceedings.
Details of the disciplinary findings and guidelines for the Resolutions by Agreement are available at the Institute’s website: www.hkicpa.org.hk
