Members’ forums on further reform of the accounting profession
Further reform of the accounting profession is expected to commence in the fourth quarter of this year. Upon commencement, the Financial Reporting Council (FRC) will become the independent regulator for the accounting profession in Hong Kong and its name will change to Accounting and Financial Reporting Council.
The FRC launched its Engagement and Consultation Paper on further reform of the accounting profession on 9 March. The paper explains its regulatory principles and approaches, and aims to help stakeholders understand its rationale and solicit their views on how to ensure its proposed policies meet the public’s expectations through an effective disciplinary regime. The FRC has invited interested parties and the public to share their views on or before 4 May so that it may take into consideration the interest of key stakeholders.
To provide members with a better understanding of the paper, the Institute will jointly organize three members’ forums on 4, 7 and 11 April with the FRC, Hong Kong Association of Registered Public Interest Entity Auditors Limited, and Society of Chinese Accountants and Auditors respectively for different groups of audiences.
As major stakeholders, members are invited to join these forums to learn from speakers from the FRC about aspects of the paper and to share their views with us. Three forums will also be recorded and made available as e-Seminars for those unable to attend. Visit the Institute’s website for the enrolment details.
Members’ forum on reviewing the election arrangements of the Council
The Secretary for Financial Services and the Treasury, Christopher Hui, published a blog post on 8 March with regards to enhancing the Institute’s Council election arrangements. The Financial Services and the Treasury Bureau (FSTB) will brief the Panel on Financial Affairs of the Legislative Council on 4 April about the proposed enhancements on the Institute’s election of Council members.
The proposed changes will likely affect all members of the Institute and it is therefore important members’ views are obtained and consulted. In this connection, the Institute has set up a new webpage on the matter, which will bring together relevant information to help members understand the proposals.
To provide members with a better understanding of the FSTB’s intentions of the proposed changes to the Council election, the Institute will organize a members’ forum on 8 April where Under Secretary for Financial Services and the Treasury, Joseph Chan, and the Legislative Councillor of the Accountancy Functional Constituency, Edmund Wong, have been invited to discuss the preliminary proposals. The Institute will also launch a survey to collect members’ feedback on the proposals in due course.
Global accounting bodies urge profession-wide commitment to reverse nature loss
The Institute has joined together with nine of the world’s leading accounting institutes to support a new call to action in response to the nature crisis, ahead of the upcoming United Nations Convention on Biological Diversity COP 15. Working together as part of the Global Accounting Alliance, we signed the call to action “Nature is Everyone’s Business” to signal the important role the profession plays in this crisis. Read the Institute’s press release for details.
Business Valuation Programme
The Business Valuation Programme is intended to help new valuation specialists or those interested in a career in valuations to enter the specialization. It features 11 compulsory and four elective modules (from which participants must choose at least two) across four phases “Valuation Fundamentals,” “Transactions Valuation,” “Financial Reporting Valuation” and “Valuation Application” for a total of 24 to 28 continuing professional development hours. The programme will be held in April to June 2022 and conducted via Zoom. More details are available on the Institute’s website.
The programme will cover:
- Business valuation essentials including valuation fundamentals and valuation standards;
- Business valuation techniques for transaction purposes;
- Valuation of various classes of assets and liabilities including purchase price allocation, intangible asset, financial instruments, property, plant and equipment, and biological assets for financial reporting purposes; and
- Case studies including the application of various valuation approaches and review of valuation reports.
Council meeting minutes
The abridged minutes from the January and February (Strategy Day) Council meetings are now available in the “Members’ area” of the Institute’s website.
Disciplinary findings
Yeung Chun Wai, Anthony CPA
Complaint: Failure or neglect to observe, maintain or otherwise apply the fundamental principle of Professional Behaviour under section 100.5(e) and as elaborated in section 150.1 of the Code of Ethics for Professional Accountants, and being guilty of dishonourable conduct.
Yeung was the Chairman, Chief Executive Officer, and an Executive Director of Great Wall Terroir Holdings Limited (formerly known as e-Kong Group Limited). At the relevant times, he was entrusted with the management of the company’s securities investment business and was authorized to operate its securities account.
The Listing Committee of the Stock Exchange of Hong Kong Limited (stock exchange) sanctioned Yeung in March 2020 for his conduct in relation to a number of material connected transactions of purchases and sales of Hong Kong listed shares, which were undertaken between him and the company between August 2015 to June 2017.
Yeung executed the transactions without the board of directors’ knowledge, and failed to obtain shareholders’ approval of some of the transactions that required such approval under the Listing Rules. In addition, Yeung failed to ensure that information contained in certain announcements about the transactions made by the company was accurate, complete and not misleading. Finding that Yeung was in breach of the Listing Rules and his director’s undertakings, the stock exchange issued a censure and opined that his retention of office would be prejudicial to the interests of investors.
Decisions and reasons: The Disciplinary Committee ordered that the name of Yeung be removed from the register of CPAs for 15 months with effect from 2 March 2022. In addition, Yeung was reprimanded and ordered to pay costs of the Institute of HK$58,386. When making its decision, the committee considered the circumstances of the case, and in particular Yeung’s blatant disregard of the disciplinary proceedings.
Hu Yi, registered student
Complaint: Hu’s falsification of the examination results on two occasions demonstrated serious misconduct which renders him unfit to become a CPA under by-law 34(1)(d) of the Professional Accountants By-Laws.
Hu was registered as a student of the Institute’s Qualification Programme (QP). At the relevant time in 2019 and 2020, he was an audit senior of a CPA firm. In March 2020, the firm conducted spot checks on the examination results submitted by its staff members and found that Hu had provided the firm with two falsified Examination Status Reports for the June and December 2019 QP examinations. The firm dismissed Hu and reported the matter to the Institute.
Decisions and reasons: The Disciplinary Committee ordered that Hu be declared unfit to remain a registered student and his name be removed from the register of registered students with effect from 30 March 2022. In addition, Hu was ordered to pay costs of the disciplinary proceedings of HK$55,465. When making its decision, the committee took into consideration the circumstances of the case, and mitigating factors.
Details of the disciplinary findings are available on the Institute’s website.
