Since January, COVID-19 has caused disruption to the work activities of Hong Kong’s accountants. In April, the Institute surveyed its executive and senior- and middle-management level members in both business and practice about how the pandemic has affected their operations, revenues, staffing, how they were responding and what support they needed from the Institute. These are some of the highlights of the survey. The full report can be found here.
Effect on accountants in business
Almost all professional accountant in business (PAIB) respondents reported decreasing revenues, while a small number of respondents reported increases in revenues. Although most of their organizations had not changed their product or service offering, over half of respondents from companies listed outside Hong Kong reported that theirs had. Respondents reported providing more online, and less face-to-face, services as a consequence of changing demands.
Across all PAIB respondents, the most common impact on their organization was restrictions on business travel and meetings, with over 80 percent reporting this. Over half of respondents from companies listed outside Hong Kong or multinationals reported stopping or slowing down new product launches and merger and acquisition activity. Respondents from government, not-for-profits and academia reported less changes than corporate organizations.
In response to the outbreak, over 60 percent of organizations had made changes to their staffing levels. The most common change was to freeze recruitment, although around one third of respondents from non-listed or privately held companies that made employment changes said that mandatory unpaid leave for employees was implemented.
Effect on accountants in practice
For professional accountant in practice (PAIP) respondents, nine in 10 reported revenues had been impacted. CPA firms with listed clients were more likely to have changed their product or service offering compared to firms without listed clients (36 percent vs. 23 percent). The Institute plans further research into how PAIPs have changed their operations.
Like for PAIBs, the most common impact was restrictions on business travel and meetings (79 percent of respondents from firms with listed clients, and 73 percent from those without). Three quarters of respondents from firms with listed clients also reported that it had impacted their ability to meet reporting deadlines.
Around 60 percent of respondents said their organizations had changed employment, with the most common change being to freeze recruitment. Fewer respondents in practice reported making redundancies or implementing mandatory unpaid leave for employees than the respondents in business.
Two thirds of respondents who worked in or oversaw the finance function said it had not changed due to the pandemic. However, this was not uniform, and respondents in the public sector and in CPA firms with listed clients reported significantly higher changes.
The most common change to finance functions across all respondents was the use of more online technologies, including cloud computing or cloud accounting software.
If the disruption continues
Respondents were also asked what their organizations would do if the disruption continued for another six months. Respondents indicated that their organizations would extend or increase work- from-home and flexible working arrangements, and many would also implement stricter financial management policies or adjust employee remuneration.
Around half of PAIB respondents would also increase their travel or meeting restrictions. Regarding PAIP respondents, those from CPA firms with listed clients had more plans in mind than from those without listed clients. This may be due to size differences, with the larger firms with greater levels of resources more able to implement policies such as, for example, implementing stricter financial management policies and to make redundancies.
Support from the Institute
Respondents were asked in an open question to list the support they needed from the Institute during the pandemic. The most frequently mentioned suggestions were for more continuing professional development (CPD) events, more information, issuing guidance and fee support.
The Institute has held nine free webinars for members since the start of the pandemic. As well as free CPD, webinars have replaced face-to-face events to enable members to keep learning during the pandemic.
Through the COVID-19 – CPA Information Centre webpage and regular emails, the Institute provides members with the information they need to tackle the challenges of the pandemic, and keep track of local and international developments.
The Institute has released guidance on financial reporting, auditing, and assurance engagements. It has also issued general guidance on managing financial distress and fraud.
New concessions for members and students for 2021 have also been announced. The Institute will continue to explore ways to help its members through the challenging economy and prepare for the future.
This survey focused on the short-term impacts of the crisis. As the local situation has stabilized, with the number of new cases being regularly reported zero in Hong Kong, the focus is beginning to change to the economic recovery. To assess how the pandemic has affected the accounting community, there will be a follow-up survey examining the longer term consequences later in the year.