PAIB conference 2018 to give members a reality check
This year’s professional accountants in business (PAIB) conference, titled “The Day After Tomorrow: A Reality Check for Accountants Today,” will take place on 8 September. It will provide an overview of the key challenges and opportunities ahead for PAIBs, with the aim of helping them keep their skills and knowledge relevant in today’s ever-evolving marketplace.
The guest of honour, Laurence Li, Chairman of the Financial Services Development Council, along with other speakers, will share their insights on topics including professional ethics in business, future of the finance function, as well as the development of the capital market. Confirmed speakers include representatives from Alipay Payment Services (Hong Kong), DBS Asia Capital, Deloitte China, EY, Grant Sherman Appraisal, and the Independent Commission Against Corruption.
Members are encouraged to send their views on the subjects to the Institute in advance via the dedicated event page on Facebook. Interested members should enrol by 3 September.
Workshop on credit facility letters
A workshop on 12 September will cover how to effectively negotiate terms and conditions with commercial banks. The workshop, which is part of the Institute’s Corporate Finance Series, will analyse term sheets in the context of bank borrowings from the perspective of an experienced banker. S. Lai, Executive Director at iFinance (Asia), will be the speaker. Interested members should enrol by 11 September.
Specialist training on international tax
The international tax course begins on 15 September and runs until January. The course aims to equip participants with international tax concepts needed to provide competent tax advice on cross-border transactions. The course is a compulsory component of the Institute’s Professional Diplomas in China Tax and Hong Kong Tax.
From CPA to CPA Plus programme
A two-day CPD programme tailored for finance professionals looking to build up a holistic business mindset, from financial investment theory to practical application, will take place on 2 and 9 September. The “From CPA to CPA Plus” programme consists of four modules covering: business mindset buildup, generally accepted management principles, structural and systematic analysis and holistic business appraisal. Participants should have at least five years of post-CPA qualification work experience. Enrolment deadline is 2 September.
Sports and Recreation Night
Around 280 members and guests joined the annual Sports and Recreation Night on 27 July, where Vice President Patrick Law, Past President Clement Chan with other members delivered a remarkable singing performance. Members enjoyed the night with plenty of networking and games.
Table tennis success in Guangzhou
Congratulations to the Institute’s table tennis team for winning the championship and three other awards, women’s singles, men’s doubles and women’s doubles, at the Integrity Cup Table Tennis Competition 誠信杯乒乓球賽 over the weekend of 21-22 July in Guangzhou. The team competed against 26 other teams from across the Guangdong province, Macau and Hong Kong.
Council meeting minutes
The abridged minutes from the June Council meeting are now available for members to read. They can be found in the “Members’ area” of the Institute’s website.
A Plus audience survey
To gain a better understanding of our readers’ interests and reading habits, members are invited to complete a quick survey, which is available on the Institute’s website. Answers will help improve the print and online versions of A Plus.
A Plus seeks Cyclothon entrants
Taking part in the Hong Kong Cyclothon in October? A Plus would like to feature participants for an upcoming article. Contact Jeremy Chan at jeremy.chan@mandl.asia for more details.
Resolution by Agreement
Cheng Po Yuen, CPA (practising) and Zenith CPA Limited
Complaint: Failure or neglect to observe, maintain or otherwise apply professional standards issued by the Institute.
Zenith CPA Limited expressed an unmodified auditor’s opinion on the consolidated financial statements of Landing International Development Limited, a company listed in Hong Kong, and its subsidiaries for the year ended 31 December 2015. Cheng was the engagement director for the audit.
The basic and diluted loss per share disclosed in the audited financial statements was misstated due to a formulaic error in the calculation of the weighted average number of ordinary shares in issue. In March 2017, the company issued a clarification announcement disclosing the correct basic and diluted loss per share.
Regulatory action: In lieu of further proceedings, the Council concluded the following action should resolve the complaint:
1. Cheng and Zenith CPA Limited acknowledge the facts of the case and their non-compliance with the relevant professional standards;
2. they be reprimanded; and
3. they jointly pay an administrative penalty of HK$25,000 and costs of HK$10,000.
Disciplinary findings
Lee Yiu Sun, CPA (practising)
Complaint: Failure or neglect to observe, maintain or otherwise apply professional standards issued by the Institute and being guilty of professional misconduct.
Lee was the executive director, chief executive officer and compliance officer of a Hong Kong-listed company, First China Financial Network Holdings Ltd. (First China). He was found by the Court of First Instance in a court action filed by Securities and Futures Commission to have breached his director’s duties to the First China by falsely putting forward a non-existent agreement, causing the company to wrongly pay a dividend of RMB18.69 million. Lee was ordered to be disqualified from being a director or involved in the management of any listed or unlisted corporation in Hong Kong for five years.
Decisions and reasons: Lee was removed from the register of CPAs for three years with effect from 12 August 2018 and was ordered to pay costs of the disciplinary proceedings of HK$35,857. When making its decision, the Disciplinary Committee took into consideration the particulars in support of the complaints, the conduct of Lee throughout the proceedings and his personal circumstances.
Seto Man Fai
Complaint: Failure or neglect to observe, maintain or otherwise apply professional standards issued by the Institute and being guilty of professional misconduct.
Seto was a former practising certified public accountant whose name was removed from the register for five years with effect from 22 March 2018 pursuant to an earlier disciplinary order. He was previously a director of a corporate practice, Parker Randall CF (H.K.) CPA Limited, which has now been de-registered. The corporate practice audited the consolidated financial statements of Sage International Group Limited, a company listed in Hong Kong, for the year ended 31 March 2011 and the period ended 31 December 2011 and expressed unmodified auditor’s opinions. Seto was the engagement director of those audits.
The Institute received a referral from the Financial Reporting Council (FRC) about irregularities in relation to the audits. There were significant deficiencies in the accounting treatment of certain acquisition transactions, convertible bonds issued and share options and warrants granted which were included in the financial statements. Seto claimed that relevant audit procedures were carried out but he failed to provide any working papers, claiming that they were withheld by a third party.
Decisions and reasons: The Disciplinary Committee ordered that a practising certificate shall not be issued to Seto for 12 months with effect from 21 March 2023. The committee further ordered Seto to pay costs and expenses of disciplinary proceedings of the Institute and the costs of the FRC in the total of HK$277,705.60. The committee noted that there was a need to safeguard public interest against significant accounting errors of a listed company, that the breaches of auditing standards were fundamental, and that the respondent was seriously incompetent. The committee further noted the FRC did not accept Seto’s assertion that relevant audit procedures had been carried out.
Andrew David Ross, CPA (practising), Fok Wai Ming, CPA (practising) and Baker Tilly Hong Kong Limited
Complaint: Failure or neglect to observe, maintain or otherwise apply professional standards issued by the Institute.
Baker Tilly was a newly appointed auditor who expressed an unmodified auditor’s opinion on the consolidated financial statements of Code Agriculture (Holdings) Limited, a company listed in Hong Kong, and its subsidiaries for the year ended 31 March 2012 (2012 financial statements). Ross was a director of Baker Tilly who issued the auditor’s report on behalf of the corporate practice. Fok, a director of Baker Tilly, was substantially involved in the audit.
The Institute received a referral from the FRC about auditing irregularities in relation to the audit of the 2012 financial statements. The group’s financial statements in the previous years included errors in the accounting treatment of a substantial acquisition. Those errors affected the opening and year-end balances and comparative information in the 2012 financial statements. Deficiencies were found in the audit procedures conducted by the respondents on the balances pertaining to the acquisition. Furthermore, Baker Tilly did not have adequate policies and procedures to ensure clear designation of an engagement director and appointment of an engagement quality control reviewer in the audit of the 2012 financial statements.
Decisions and reasons: Ross, Fok and Baker Tilly were reprimanded. In addition, the Disciplinary Committee ordered Ross, Fok and Baker Tilly to pay penalties of HK$100,000, HK$100,000 and HK$250,000 respectively. Further, the three respondents were ordered to pay costs and expenses of disciplinary proceedings of the Institute and the costs of the FRC in the total of HK$117,372.20. The committee noted from evidence presented in the disciplinary proceedings that the breaches identified were a manifestation of a systemic problem in the respondents’ audits, which included audits of listed companies that could have adversely affected public investors’ interests.
Details of the disciplinary findings and guidelines for the Resolutions by Agreement are available at the Institute’s website: www.hkicpa.org.hk
