A Plus magazine revamp coming soon
To enhance the overall experience for readers of A Plus, the Institute will be implementing changes to the publication in two phases.
In the first phase, A Plus will halt the production of physical copies, shifting fully online starting with the September 2022 issue. Members will continue to have full access to the magazine through the digital, pdf and flipbook versions with timely enhancements to the user interface. The move is part of the Institute’s sustainability plan and commitment to achieving net zero carbon emissions.
In the second phase, the Institute will introduce a new approach to editorial content and shift towards a quarterly publication schedule starting next year. The last monthly publication will be the October 2022 issue with the first quarterly issue coming in January 2023. Look out for further updates on the revamped A Plus.
Filling a vacancy on the Institute’s Council
A vacancy has arisen in the Council of the Institute. Professor Nelson Lam FCPA (practising), will take office as the Director of Audit in the Hong Kong government, effective 1 July 2022, and has tendered his resignation as Council member with effect from 24 June 2022.
A general invitation has been launched to all members to submit nomination of suitable candidates for consideration for appointment by the Council to fill the vacancy. Interested parties should refer to the latest notice in the Members’ Area on the Institute’s website for details on eligibility and the nomination process.
Short survey on Specialist Interest Groups
The Institute is conducting a two-minute survey on members’ interest in the Institute’s Specialist Interest Groups and their activities. The survey will help the Institute better understand and cater to the needs and interests of members, and to provide members the best possible support through the activities organized and the information provided. Members should complete the survey by 22 July.
The Institute welcomes passage of resolution to amend Protection of Wages on Insolvency Ordinance
The Institute welcomes the passage of the resolution in the Legislative Council on 16 June to amend the Protection of Wages on Insolvency Ordinance (PWIO). The resolution will increase the ceilings for wages in arrears, wages in lieu of notice, severance, untaken statutory holidays and untaken leave, under the PWIO.
The Institute has long been urging the Secretary for Labour and Welfare (SLW) to review and increase the relevant ceilings under the PWIO, in particular the limits on wages in arrears and wages in lieu of notice, which had not been reviewed for over 20 years. As the Institute’s then president wrote in a letter to the SLW in April 2020, the Protection of Wages on Insolvency Fund has always been a vital source of early payments for workers who are made unemployed due to the failure and winding up of their employers, and who have not received their full entitlements. Given the increase in unemployment over the past two years, this had become an even more important issue. The adjusted maximum amounts came into effect on 17 June.
Stanley Dragon Boat Championships 2022
The Institute’s dragon boat team participated in the Stanley Dragon Boat Championships 2022 on 3 June and won the first runner-up in the Mixed Bronze Cup. Congratulations to our athletes! Read about their experience and love of dragon boat racing here.
Resolution by agreement
Fong Tak Ching CPA (practising) and Zhonghui Anda CPA Limited
Complaint: Failure or neglect to observe, maintain or otherwise apply Hong Kong Standard on Auditing (HKSA) 450 Evaluation of Misstatements Identified during the Audit, HKSA 260 Communication with Those Charged with Governance, and HKSA 230 Audit Documentation.
Zhonghui Anda CPA Limited audited the consolidated financial statements of Fresh Express Delivery Holdings Group Co., Limited, a Hong Kong listed company, and its subsidiaries for the year ended 31 March 2017. Fong was the engagement director of the audit.
The Institute received a referral from the Financial Reporting Council (FRC) about audit irregularities. The FRC noted that an immaterial overstatement of liability had not been adjusted in the financial statements, but the respondents failed to include the overstated amount in a summary of unadjusted misstatements. In addition, the respondents failed to prepare adequate audit documentation of their procedures carried out on the above misstatement and the determination of audit materiality.
Regulatory action: In lieu of further proceedings, the Council concluded the following should resolve the complaint:
- The respondents acknowledge the facts of the case and their non-compliance with professional standards;
- The respondents be reprimanded; and
- Fong and Zhonghui Anda CPA Limited pay an administrative penalty of HK$35,000 and HK$50,000 respectively to the Institute, and they jointly pay the costs of the Institute of HK$15,000 and of the FRC of HK$112,967.
Ng Kwok Ching, Jeremy CPA (practising)
Complaint: Failure or neglect to observe, maintain or otherwise apply HKSA 500 Audit Evidence and HKSA 230 Audit Documentation.
Ng is the sole proprietor of Jeremy Ng & Company (formerly known as Tang & Ng), a CPA firm. He is responsible for the firm’s quality control system and the quality of its audit engagements. The Institute’s follow-up practice review visit to the firm in 2016 found that a number of deficiencies noted in the initial practice review remained uncorrected, and the audit work performed on the sole client in the relevant period fell below the standard expected. The audit deficiencies related to obtaining evidence for a number of material items in the financial statements, obtaining management’s representation letter and preparing documentation.
Decisions and reasons: Ng was reprimanded. In addition, the practising certificate issued to Ng was ordered to be cancelled with no issuance of a practising certificate to him for 12 months. Ng was also ordered to pay a penalty of HK$50,000 and costs of disciplinary proceedings of HK$55,000. When making its decision, the Disciplinary Committee took into account the particulars of the breaches committed in this case, the parties’ submissions, and the respondent’s conduct throughout the proceedings. The committee noted that the breaches were serious in view of Ng’s failure to address the audit deficiencies found in the initial practice review, his lack of understanding at the level of competence expected of a professional accountant and the questionable accuracy of the audited financial statements.
Ng appealed the committee’s decision. Following the Court of Appeal’s dismissal of the appeal in April 2022, the practising certificate of Ng was cancelled with effect from 18 May 2022.
Jimmy Siu CPA (practising), Yip Kai Yin CPA and Elite Partners CPA Limited
Complaint: Failure or neglect by Siu and Elite Partners CPA Limited to observe, maintain or otherwise apply HKSA 200 Overall Objectives of the Independent Auditor and the Conduct of an Audit in Accordance with Hong Kong Standards on Auditing, HKSA 500 Audit Evidence, and HKSA 540 Auditing Accounting Estimates, Including Fair Value Accounting Estimates, and Related Disclosures. Failure or neglect by Yip to observe, maintain or otherwise apply HKSA 220 Quality Control for an Audit of Financial Statements.
Elite Partners CPA Limited expressed an unmodified auditor’s opinion on the consolidated financial statements of L & A International Holdings Limited, a Hong Kong listed company, and its subsidiaries for the year ended 31 March 2017. Siu was the engagement director and Yip was the engagement quality control reviewer of the audit.
The Institute received a referral from the FRC concerning deficient procedures carried out by the audit team on impairment assessment of the company’s interest in an associate. There was also inadequate engagement quality control review of the significant judgements made and conclusions reached by the audit team in the impairment assessment.
Decisions and reasons: The Disciplinary Committee reprimanded the respondents. In addition, the committee ordered the respondents to jointly pay a penalty of HK$500,000 and the costs of the Institute and the FRC totalling HK$258,871.65. When making its decision, the committee took into consideration the particulars in support of the complaints, the parties’ submissions, and the respondents’ admission and their circumstances.
Details of the resolution by agreement and disciplinary findings are available on the Institute’s website.