The Institute pays tribute to Mary Lam
It was with much sadness that we learned of the sudden passing away of Mary Lam, the Institute’s director of member support, and a member herself, on 18 March 2020. Mary worked at the Institute for over 23 years and made a very valuable contribution to its work with her all-round knowledge and abilities, coupled with a tremendous dedication and helpfulness. During her career at the Institute, Mary provided support to members in a very wide range of areas, including members in business, small- and medium-sized practices, young members, Mainland affairs, restructuring and insolvency, forensic accounting, corporate finance, corporate and Institute governance, tax training, and continuing professional development. She will be greatly missed by her colleagues and friends in the profession. We express our deepest condolences to her family.
Roundtable discussion: comprehensive review of the HKFRS for Private Entities
The Institute is holding a roundtable discussion on 18 May, gathering the Institute’s staff and preparers or practitioners of financial statements applying the HKFRS for Private Entities, to respond to the International Accounting Standards Board’s Request for Information (RFI) for the IFRS for SMEs standard/HKFRS for Private Entities. Members are invited to join the roundtable to share their views on whether and how aligning the IFRS for SMEs standard with the full IFRSs would benefit users of financial statements without causing undue cost for small- and medium-sized enterprises. Any revisions to the IFRS for SMEs standard will be incorporated in the HKFRS for Private Entities in accordance with the Institute’s convergence policy. Members can also submit comments on the RFI to the Institute by 12 June.
Corporate Finance Series webinars
Enrol in the webinars on 15 April and 29 April to learn about the different types of secondary fundraising for listed companies and gain insights on how to handle corporate acquisitions or disposals from compliance prospective.
Recordings of free webinars now available
The three webinars on topics related to the COVID-19 pandemic held in February and March are now available for free via the e-seminars website. The courses are: leading and motivating a virtual team; practical employment issues arising out of COVID-19 outbreak; and the impact of COVID-19 on commercial contracts and points to consider in a business continuity plan.
Hu Chiu Lun, Alan, CPA
Complaint: Failure or neglect to observe, maintain or otherwise apply Hong Kong Standard on Quality Control 1 Quality Control for Firms that Perform Audits and Reviews of Financial Statements, and Other Assurance and Related Services Engagements (HKSQC 1), the fundamental principle of integrity in sections 100.5(a), 110.1 and 110.2 of the Code of Ethics for Professional Accountants, and the fundamental principle of professional competence and due care in sections 100.5(c) and 130.1 of the Code, and being guilty of professional misconduct.
Hu was practising in his own name and was responsible for his practice’s quality control system and the quality of its audit engagements. In 2016, the practice was subject to its first practice review which identified deficiencies in its quality control system concerning the monitoring process and custody of engagement documentation.
In 2017, a follow-up practice review was carried out and the Institute found that the practice had failed to rectify the deficiencies previously identified. In addition, significant deficiencies were found in procedures conducted on revenue recognition, external confirmations and forming the auditor’s opinion in the practice’s audit of a private company. In that audit, Hu compiled certain working papers after the auditor’s report date and knowingly misrepresented to the reviewer that those working papers were prepared, and documented procedures performed, before the auditor’s report was issued.
Decisions and reasons: The Disciplinary Committee reprimanded Hu and ordered cancellation of his practising certificate with no issuance of a practising certificate to him for 22 months with effect from 15 March 2020. In addition, Hu was ordered to pay a penalty of HK$30,000 and costs of disciplinary proceedings of HK$30,000. When making its decision, the committee took into consideration the particulars of the breaches committed in this case, Hu’s conduct throughout the proceedings and his personal circumstances.
Law Kwong Wah, CPA
Complaint: Failure or neglect to observe, maintain or otherwise apply Hong Kong Standard on Auditing (HKSA) 315 Identifying and Assessing the Risks of Material Misstatement through Understanding the Entity and Its Environment; HKSA 240 The Auditor’s Responsibilities Relating to Fraud in an Audit of Financial Statements; and HKSA 500 Audit Evidence; HKSQC 1; and the fundamental principle of professional competence and due care in sections 100.5(c) and 130.1 of the Code of Ethics for Professional Accountants.
The Institute completed a practice review on K.W. Law & Co. (practice) of which Law was the sole proprietor. The review identified significant deficiencies in the practice’s quality control system and two audit engagements reviewed by the practice reviewer.
Decisions and reasons: The Disciplinary Committee reprimanded Law and ordered that he would not be issued a practising certificate for 18 months effective from 4 February 2020. In addition, Law was ordered to pay a penalty of HK$50,000 and costs of disciplinary proceedings of HK$51,785. When making its decision, the committee took into consideration the particulars of the breaches committed in this case, Law’s conduct throughout the proceedings and his personal circumstances.
Details of the disciplinary findings are available at the Institute’s website.