Young Members Conference goes virtual
The Institute’s annual Young Members Conference this year will be held as a live webinar on 21 November. With the theme “Out of the box – options for young accountants,” the conference will include a mix of young and seasoned speakers from different fields, sharing their personal experiences of working outside Hong Kong or in specialisms outside of audit and accounting. During the two-hour event, recruitment consultants will also provide tips on career planning and an overview of the current job market. The conference aims to keep young CPAs abreast of topical issues relevant to the accounting profession and equip them with the right knowledge and tools for their career development. Those interested should enrol online by 20 November.
Annual SMP Symposium
The 2020 SMP Symposium will be held as a live webinar on 27 November. Two sessions will provide participants updates on current issues affecting small and medium practices, including taxation, major financial reporting and auditing standards, the TCSP licensing regime and anti-money laundering and counter-financing of terrorism requirements, Limited Partnership Fund Ordinance, adoption of technologies during the pandemic, practice review and compliance matters, as well as recent development of the Institute and the International Federation of Accountants. More details of the webinar can be found on the Institute’s website.
Mandatory CPD requirements for 2021 membership renewal
Members who joined the Institute before 1 December 2017 are required to complete 120 hours of continuing professional development (CPD) in the three years ending 30 November 2020, of which 60 hours must be verifiable. Members facing difficulties in achieving the CPD requirements for their 2021 membership renewal, particularly due to the COVID-19 pandemic, may apply for an extension up to 31 May 2021 to make up for the shortfall in CPD hours. Applications for extension should be made to the Institute via the CPD declaration in the online Annual Return on or before 15 December. More details can be found on the Institute’s website.
Council meeting minutes
The abridged minutes from the September Council meeting are now available for members to read. They can be found in the “Members’ area” of the Institute’s website.
Disciplinary findings
Lo Yip Tong, CPA
Complaint: Failure or neglect, without reasonable excuse, to comply with a direction issued by the Practice Review Committee under section 32F(2)(b) of the Professional Accountants Ordinance, and in breach of the fundamental principle of integrity in sections 100.5(a) and 110 of the Code of Ethics for Professional Accountants.
Lo was the sole proprietor of Y.T. Lo & Co., which was subject to a follow-up practice review in May 2018. As a result of Lo’s failure to cooperate, the committee issued a direction requiring him to provide the necessary information to enable the practice review to be conducted in the third quarter of 2018. Lo failed to comply with the committee’s direction, claiming falsely that his office was in disarray due to a recent typhoon. As a result, the follow-up practice review could not be conducted.
Decisions and reasons: Lo was removed from the register of CPAs for one year with effect from 5 October 2020. In addition, Lo was ordered to pay costs of disciplinary proceedings of HK$64,012. When making its decision, the Disciplinary Committee took into consideration the particulars of the breaches committed in this case, Lo’s conduct throughout the proceedings and his personal circumstances.
Ng Ka Kuen, CPA (practising)
Complaint: Failure or neglect to observe, maintain or otherwise apply (i) the fundamental principle of professional competence and due care in sections 100.5 (c) and 130 of the Code of Ethics for Professional Accountants, and (ii) Hong Kong Standard on Quality Control 1 Quality Control for Firms that Perform Audits and Reviews of Financial Statements, and Other Assurance and Related Services Engagements.
Ng was the sole practising director of UC CPA (Practising) Limited (practice) and was responsible for the practice’s quality control system. The practice was selected by the Institute for practice review in 2016.
The practice reviewer identified multiple breaches of auditing standards in two audit engagements selected for the review. The breaches show that Ng did not carry out the audits with the level of professional competence and due care expected of him. In addition, the breaches show that the practice failed to have an adequate system of quality control to ensure that it had adequate human resources to uphold audit quality and that it performed audit engagements in accordance with professional standards.
Decisions and reasons: The Disciplinary Committee reprimanded Ng and ordered that the practising certificate issued to Ng be cancelled and no practising certificate shall be issued to him for 16 months. In addition, Ng was ordered to pay costs of the disciplinary proceedings of HK$52,977. When making its decision, the committee took into account the particulars of the breaches committed in this case, Ng’s conduct throughout the proceedings and his personal circumstances.
Ng lodged an appeal against the committee’s order but subsequently he withdrew the appeal, whereupon his practising certificate was cancelled for 16 months with effect from 21 September 2020 pursuant to the order.
Wong On Yee, CPA (practising) and CWC CPA Limited
Complaint: Failure or neglect by Wong and CWC to observe, maintain or otherwise apply Hong Kong Standard on Auditing (HKSA) 200 Overall Objectives of the Independent Auditor and the Conduct of an Audit in Accordance with Hong Kong Standards on Auditing, HKSA 230 Audit Documentation, HKSA 500 Audit Evidence, HKSA 560 Subsequent Events and Hong Kong Standard on Assurance Engagements 3000 Assurance Engagements Other than Audits or Reviews of Historical Financial Information. Refusal or neglect by Wong and CWC to comply with the Corporate Practices (Registration) Rules. Further, Wong and CWC have been guilty of professional misconduct.
CWC was the auditor of W. Falcon Asset Management (Asia) Limited, a licensed corporation under the Securities and Futures Ordinance (Cap. 571) providing investment dealing and advisory services, for each of the three years ended 31 March 2015 to 2017. CWC expressed unmodified auditor’s opinions on the company’s financial statements for each of the three years. CWC also issued compliance reports on the company for each of the three years for the company’s submission to the Securities and Futures Commission (SFC) and expressed unqualified conclusions. Wong was the engagement director in those audit and compliance reporting engagements.
In July 2017, the SFC issued a restriction notice to prohibit the company from carrying on any regulated activities, and later in February 2019 the SFC revoked the company’s licence and disciplined the company. In the course of the SFC’s investigations, it was found that the company had window-dressed the liquid capital reported in its monthly financial returns, in that certain personal cheques issued by one of the company’s directors in favour of the company were dishonoured on the first business day after the end of the month. The SFC referred the matter to the Institute concerning the conduct of the company’s auditor.
The Institute’s investigation discovered a number of deficiencies. In the 2016 and 2017 audits, the respondents were found to have failed to perform sufficient appropriate audit procedures in respect of the dishonoured cheques at the beginning of various months, and failed to document a purported enquiry with management concerning the issue. Also, in respect of a bank account balance where the ledger amount varied significantly from the bank confirmation amount, the respondents failed to evaluate the implications of such a variance on the financial statements, and failed to document the associated reconciliation. Further, in the 2015 and 2016 auditor’s reports, the respondents failed to state the name of Wong as the engagement director and her practising certificate number.
In the 2015 to 2017 compliance reporting engagements, the respondents failed to plan and perform procedures on the company’s compliance with the regulatory requirements concerning the sufficiency of liquid capital, and failed to issue qualified conclusions for the years 2016 and 2017 in view of the circumstances surrounding the dishonoured cheques. Also, the respondents failed to plan and perform sufficient procedures on the company’s control over client monies held and its compliance with the relevant regulatory requirements. Further, they made an incorrect statement in the 2016 and 2017 reports about the company being subject to a limiting condition to hold client assets, when in fact such a condition was removed in June 2015.
Decisions and reasons: The respondents were reprimanded. In addition, the practising certificate of Wong was ordered to be cancelled with no issuance of practising certificate to her for 12 months, effective from 5 October 2020. In addition, the respondents were ordered to jointly pay a penalty of HK$200,000 and costs of the Institute of HK$73,428. When making its decision, the Disciplinary Committee considered the particulars in support of the complaint, Wong’s personal circumstances and the conduct of Wong and CWC throughout the proceedings.
Details of the Disciplinary findings are available at the Institute’s website.
