Institute news


Left to right: Institute Chief Executive and Registrar Raphael Ding, Vice President Johnson Kong, IASB Chair Hans Hoogervorst, Financial Secretary of Hong Kong Paul Chan Mo-po, Chairman of IFRS Foundation Trustees Michel Prada, Institute President Eric Tong and Vice President Patrick Law.

Joint Institute-IFRS Foundation stakeholder dinner

The Institute and the International Financial Reporting Standards (IFRS) Foundation co-hosted a dinner titled Hong Kong and IFRS Standards: Past, Present and Future, attended by representatives from leading business organizations and regulators in Hong Kong on 31 January.

Paul Chan Mo-po, Financial Secretary of the government, gave the keynote speech, while Chairman of IFRS Foundation Trustees Michel Prada delivered the welcome speech, and Institute President Eric Tong introductory remarks.

Following the speeches, a panel debate on the theme was moderated by Jennifer Hughes, Asia Finance Editor of Reuters with panellists Ashley Alder, Chief Executive Officer of the Securities and Futures Commission; Melissa Brown, Partner at Daobridge Capital; Hans Hoogervorst, Chair of the International Accounting Standards Board; and James Riley, Group Chief Executive of Mandarin Oriental. The panel is available for viewing on the Institute’s YouTube channel.


Consultation on Practical Experience Framework

The Institute has issued the Consultation Paper on Proposed Changes to Practical Experience Framework  which sets out the proposals on refining the practical experience requirements and enhancing the practical experience process. The review of the Practical Experience Framework is a continuation and an integral part of the development of the new Qualification Programme.

The revised framework enhances the flexibility of the practical experience requirements, strengthens the quality assurance of the Authorized Employer and Authorized Supervisor system and promotes communication through an online system tracking QP students’ progress.

The Institute is hosting information sessions for members and students – more details are available on the website. The consultation closes on 4 May.



Budget proposals: being smart, staying ahead and staying healthy

The Institute released its budget proposals for the government’s 2018-19 budget at a press briefing hosted by Taxation Faculty Executive Committee Chairman, So Kwok Kay, and Budget Proposals Sub-committee Convenor, Curtis Ng on 5 February.

The proposals include recommendations on the promotion of start-ups and innovation, measures to promote research and development, measures to improve the tax system, and policies to improve community well-being.


Financial Controllership Programme graduation cocktails

On 9 February the Institute held a graduation ceremony for the first cohort of the Financial Controllership Programme (FCP). The evening celebrated the achievements of the 18 graduates and was attended by Council members, course directors and facilitators, and course participants from the previous trial run.

The FCP helps accountants transition from practising to business, supporting the development of the skills they need in business roles such as in risk management and corporate governance, and the application of accounting to business decision making. Graduates develop the rounded skill set needed by senior financial leaders in business.

The FCP will soon open for applications for this year. More details about the programme can be found on the Institute’s website.


Useful information on the Greater Bay Area

With the Greater Bay Area initiative drawing increasing attention, the Institute is collating useful reports and insights – as well as official government papers – to assist members’ research into the issues and opportunities in the development of the Greater Bay Area as well as the role of Hong Kong in the initiative. The resources can be found under the Mainland China section of the Institute’s website.


Reminder: EGM on 2 March

The Institute has issued an Information Paper (available in the Members’ area of the website) for the extraordinary general meeting (EGM) on 2 March. The EGM begins at 7:00 p.m. in the Auditorium, 27th floor, Wu Chung House. Members are advised to regularly check into the “EGM 2018” section of the Institute website for updates.


Guidelines on new anti-money laundering regulations

With the passing of the Anti- Money Laundering and Counter- Terrorist Financing (Financial Institutions) (Amendment) Bill through LegCo, a new anti-money laundering and terrorist financing regime will become effective from 1 March. This new regime will affect the business of accountants and trust company operators, who should read the guidelines published by the Institute and available on the website.


Disciplinary findings

Andrew David Ross, CPA (practising), Fok Wai Ming, CPA (practising) and Baker Tilly Hong Kong Limited

Complaint: Failure or neglect by Baker Tilly to observe, maintain or otherwise apply Hong Kong Standard on Auditing (HKSA) 230, HKSA 320, HKSA 500, HKSA 520, HKSA 540, HKSA 545, HKSA 620, HKSA 700 and Hong Kong Standard on Quality Control 1. Failure or neglect by Ross and Fok to act diligently in accordance with section 100.4 (c) as elaborated in section 130.1 of the then applicable Code of Ethics for Professional Accountants. Ross was also in breach of HKSA 220 for failing to carry out an objective engagement quality control review.

Baker Tilly audited the financial statements of a Hong Kong listed company, Century Ginwa Retail Holdings Limited (formerly known as China Golden Development Holdings Limited) and its subsidiaries for the years ended 31 December 2008 and 2009 (the financial statements). Ross was the director who issued the auditor’s reports on behalf of Baker Tilly and Fok, as a senior audit team member, was substantially involved in the audits of the financial statements.

The Institute received a referral from the Financial Reporting Council (FRC) about auditing irregularities relating to the listed company’s non-compliance with financial reporting standards regarding the recognition and/or measurement of (i) assets and liabilities relating to the acquisition of a subsidiary; (ii) impairment loss on goodwill; (iii) revenue transactions relating to customer loyalty program; (iv) depreciation of certain leasehold improvements; (v) social insurance; and (vi) contingent rentals in the financial statements.

Decisions and reasons: All three respondents were reprimanded. The Disciplinary Committee further ordered Ross, Fok and Baker Tilly to pay penalties of HK$100,000, HK$100,000 and HK$250,000 respectively. All respondents were ordered to pay costs and expenses of disciplinary proceedings of the Institute and the FRC in the total sum of HK$124,448.30, to be shared equally by them. Fok was ordered to pay HK$14,912 for the additional costs incurred in his case. When making its decision, the Disciplinary Committee took into consideration the particulars of the breaches committed in this case, the respondents’ admission of the complaints and their conduct throughout the proceedings.

Baker Tilly Hong Kong Limited, Andrew David Ross, CPA (practising) and Kwok Lai Ha, Helena, CPA (practising)

Complaint: Failure or neglect to observe, maintain or otherwise apply professional standards issued by the Institute.

Baker Tilly expressed an unqualified audit opinion on the consolidated financial statements of China North East Petroleum Holdings Limited (the company), a United States- listed company, and its subsidiaries for the year ended 31 December 2009. The audit was required to be conducted in accordance with the standards of the Public Company Accounting Oversight Board (PCAOB). Ross was the engagement director and Kwok was the director-in-charge.

The U.S. Securities and Exchange Commission initiated disciplinary proceedings against the respondents after finding breaches of PCAOB auditing standards in the audit. The respondents failed to identify material transactions between the company and its directors as related party transactions and revise the audit planning regarding fraud risks in light of those transactions. In December 2014, the respondents agreed with the commission that sanctions be imposed on them without their admission of the audit deficiencies.

The Disciplinary Committee found that the respondents were in breach of the fundamental principle of Professional Competence and Due Care under sections 100.4(c) and 130.1 of the Code of Ethics for Professional Accountants.

Decisions and reasons: All three respondents were reprimanded. In addition, the committee ordered each of Baker Tilly, Ross and Kwok to pay a penalty of HK$100,000, HK$70,000 and HK$30,000 respectively. Further, the three respondents were ordered to pay costs of the disciplinary proceedings of HK$300,000. When making its decision, the committee took into consideration the particulars in support of the complaint, the parties’ submissions and the respondents’ conduct throughout the proceedings.

Chan Hoi Shing, CPA (practising)

Complaint: Failure or neglect to observe, maintain or otherwise apply professional standards issued by the Institute and being guilty of professional misconduct.

Chan practised under his own name and was responsible for his practice’s quality control system. While carrying out a practice review, the reviewer found that Chan failed to establish and maintain an effective system of quality control in respect of engagement performance and client acceptance and continuance procedures. In addition, Chan was found to have misused qualified opinions to circumvent necessary audit procedures.

Decisions and reasons: The practising certificate issued to Chan is to be cancelled with effect from 8 February 2018 and no practising certificate shall be issued to him for six months. In addition, Chan was ordered to pay costs of disciplinary proceedings of HK$25,000. When making its decision, the Disciplinary Committee took into consideration the particulars in support of the complaint, the parties’ submissions, Chan’s early admission and the remedial actions he had undertaken.

Details of the disciplinary findings are available at the Institute’s website:

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