(From left to right) Curtis Ng, Ho Lok Sang, Kenneth Leung, David M. Webb and KK So.
Institute hosts budget forum
The Institute hosted a lively budget forum in the evening of budget day on 27 February. Panellists, Legislative Councillor Kenneth Leung, Chair of the Taxation Faculty Executive Committee, KK So, Professor Ho Lok Sang, and shareholder activist David M. Webb, discussed their views on the budget and on the government’s fiscal and related policies. Curtis Ng, Convenor of the Budget Proposals Subcommittee, was the moderator. Read Ng’s response to the 2019-20 Hong Kong budget here.
Hong Kong’s Financial Secretary, Paul Chan, adopted a fairly fiscally prudent approach, seeking to manage overall expenditure and meet the community’s expectations in various areas. Among the key objectives of the budget are solidifying Hong Kong’s position as a financial service centre, strengthening its role in innovation and technology, and supporting diversification of the economy.
Institute meets the Accounting Standards Board of Japan
Representatives of the Institute and the Accounting Standards Board of Japan met on 25-26 February in Hong Kong to provide updates on their respective activities. They also exchanged views on how to improve the accounting for goodwill, business combinations under common control and intangible assets, as well as observations on the quality of fair value measurement and the implementation of major new International Financial Reporting Standards in respective jurisdictions. The two bodies also explored opportunities for future cooperation, and agreed to continue holding bilateral meetings.
Institute takes part in Hong Kong Money Month 2019
As part of Hong Kong Money Month 2019, the Institute organized seven “Rich Kid, Poor Kid” storytelling sessions in primary and secondary schools for over 1,000 students. Through the events, our Accountant Ambassadors told attendees about the importance of fiscal prudence and setting financial goals.
Compliance Department annual report released
The Institute has published the 2018 Compliance Annual Report, which outlines the Compliance Department’s key activities for 2018. The report also features the process review of the department’s operations carried out by the Regulatory Oversight Board. The report is available on the Institute’s website.
Compliance Forum 2019
The Institute’s Compliance Forum will take place on 10 April. Speakers will help members to better apply professional scepticism; comply with relevant professional requirements; and strengthen the quality of their professional work through compliance. The forum will also review past cases to identify common pitfalls. Interested members should enrol by 3 April on the Institute’s website.
Oxfam Trailwaker 2018 awards
Institute members were honoured at the prize presentation ceremony of Oxfam Trailwalker 2018, held on 22 February. The Institute’s team SARA, which achieved an Institute record-breaking time of 16 hours and 42 minutes, received the Speed Award for the accountancy category. The Institute was also presented the Outstanding Fundraiser Award for raising HK$167,888.
All CPA runners are invited to join the post-marathon drinks on 29 April to share their experiences of the Standard Chartered Marathon. The event will feature the presentation of CPA marathon trophies (for members) and SRC marathon trophies (for QP graduates and students) to outstanding runners. Find out more on the Institute’s website.
Minutes from the January Council meeting are now available for members to read. They can be found in the “Members’ area” of the Institute’s website.
Deborah Annells, CPA
Complaint: Failure or neglect to observe, maintain or otherwise apply the fundamental principles of Integrity, Professional Competence and Due Care and Professional Behaviour in sections 100, 110, 130 and 150 of the Code of Ethics for Professional Accountants, as well as section 270 Custody of Client Assets, section 460 Clients’ Monies and section 450 Practice Promotion of the Code, as well as professional misconduct and dishonourable conduct.
Annells controlled a group of companies in Hong Kong which provided trust and tax advisory services. Between December 2011 and March 2014, the Institute enquired into various complaints lodged by Annells’ clients and a former employee. The subject matter of the complaints included the use of trust monies dishonestly and for unauthorized purposes, failing to separate client funds from funds of the practices, the use of forged documents or making misleading statements to clients regarding the integrity or application of their funds, and the theft of client funds. Annells was also alleged to have made disparaging remarks about the services of another CPA who was her former employee.
During the course of the disciplinary process, Annells was prosecuted in both the District and High Courts for a number of offences including perverting the course of justice, theft, fraud and possessing a false document. She was convicted of 45 offences of theft, one offence of possession of a false instrument, and one offence of fraud, and was sentenced to nine years’ imprisonment in July 2016. Due to Annells’ incarceration, the Disciplinary Committee directed that the matter be decided on the papers and no oral hearing be held. Notwithstanding her conviction, Annells denied a majority of the disciplinary charges brought against her.
Decisions and reasons: The committee ordered that the name of Deborah Annells be removed from the register of CPAs permanently. In addition, Annells was ordered to pay partial costs of the disciplinary proceedings. The committee will determine the amount of costs to be paid by Annells after considering the parties’ submissions on that issue.
The committee noted that the breaches concerning trust monies and client funds in this case are at the most serious end of the potential range of misconduct by a CPA. While noting that Annells is serving a prison sentence as punishment, the committee considered that the interests of the public require protection against her unscrupulous conduct once she is free to work again. The committee further noted a number of aggravating factors: Annells’ lack of remorse and financial benefit from the breaches, the absence of restitution to the clients, and the number of clients affected. The committee was therefore of the view that Annells’ actions warranted permanent removal of her name from the register of CPAs.
Chan Chant Fai, CPA (practising) and Fairyield CPA Limited
Complaint: Failure or neglect to observe, maintain or otherwise apply section 290.128 of the Code of Ethics for Professional Accountants, dealing with independence requirements for audit engagements.
Fairyield audited the financial statements of a private company for the financial periods/years ended 31 March from 2005 to 2012. Chan was the engagement director.
At the time of the audits, an immediate family member of Chan was a director of the client company. This significant threat to auditor independence could have only been reduced to an acceptable level by Chan withdrawing from the audit team. Chan’s failure to do so significantly compromised the independence of the audits.
Decisions and reasons: The Disciplinary Committee reprimanded the respondents and ordered them to jointly pay a penalty of HK$200,000 and costs of the Institute of HK$35,134. When making its decision, the committee noted independence is a fundamental principle of the profession, and sufficient sanctions must be imposed for this breach to maintain public confidence in the profession. In mitigation, the committee noted the private company was set up solely to handle assets of a family and had no outside creditors or debtors, and that the respondents did not stand to make any financial gain.
Details of the disciplinary findings are available at the Institute’s website: www.hkicpa.org.hk.