Institute news

 


Best Corporate Governance Awards 2019 calls for entries

The Institute’s Best Corporate Governance Awards, which celebrates its 20th anniversary this year, is now open for entries until 12 August.

Eligible listed companies and public sector or not-for-profit organizations can enter the following categories:

  • Hang Seng Index (HSI)-constituent companies
  • Non-HSI-constituent companies – Large market capitalization
  • Non-HSI-constituent companies – Medium market capitalization
  • Non-HSI-constituent companies – Small market capitalization
  • H-share companies and other Mainland enterprises
  • Public sector/Not-for-profit organizations – Large organizations
  • Public sector/Not-for-profit organizations – Small- and medium-size organizations

Other companies or organizations that demonstrate sound corporate governance performance, or strengths in important facets of good governance, may be given special mentions, while commendations may be awarded for website corporate governance-related information.

Smaller listed companies, with a market capitalization of no more than HK$6 billion as of 30 April, and public sector or not-for-pro t organizations, are invited to apply to be considered for the Self-nomination Awards for Good Corporate Governance Practices. “This particular award focuses on sectors where, experience shows, greater effort is still needed to promote effective corporate governance,” explained Institute President Patrick Law.

More details on the 2019 Best Corporate Governance Awards can be found on the Institute’s website.

National Day Celebration Dinner

The 70th National Day Celebration Dinner for the accounting profession will take place on 12 September at the Hong Kong Convention and Exhibition Centre. Members are encouraged to book seats, become a sponsor, offer compliments in newspaper supplements, and donate prizes.

More details are available on the Institute’s website.

2019 Honours List

The Institute sends its heartiest congratulations to the following members who received honours from the HKSAR Government for their distinguished service. Congratulations to past vice-president Carlson Tong (Gold Bauhinia Star), Fung Pui-cheung (Bronze Bauhinia Star), and past president Clement Chan (Medal of Honour). The Institute also offers its congratulations to new Justices of the Peace Kwok Wing Leung, Andy, Leung Yin Fun, Fanny, and lay council member Theresa Ng Choi Yuk.


Annual taxation conference 2019

More than 950 people attended the Institute’s annual taxation conference on 20 July at InterContinental Hong Kong. Speakers covered recent changes in tax legislation, new departmental practices and proposed tax initiatives, and Hong Kong Board of Review decisions and court cases. During the conference, KK So, Chair of the Institute’s Taxation Faculty Executive Committee, and Partner – Tax Services at PwC, moderated a panel discussion on contemporary transfer pricing issues in Hong Kong. Look out for a write up of the panel discussion in a future issue of A Plus.

Renewal of CIMA agreement for mutual examination paper exemptions

The agreement for mutual examination paper exemptions between the Institute and the Chartered Institute of Management Accountants (CIMA) has been renewed for five years. To find out more about the requirements for Institute members apply for CIMA membership, visit the Institute’s website.

Enrol in the China tax course

The Institute is accepting enrolments for the China tax course, starting on 24 August, a part-time programme providing foundation knowledge on Mainland taxation laws and practice, and their application to tax computations. It is a compulsory component of the Institute’s Professional Diploma in China Tax (中國稅務專業文憑). The course, conducted in Cantonese or Putonghua, consists of nine workshops and seven tutorials covering enterprise income tax; individual income tax; value-added tax; consumption tax; customs duty; and transaction and property-related taxes and specific purpose taxes. Those interested should enrol by 16 August or attend the demo lesson on 8 August.

Disciplinary finding

Chan Kam Fuk, CPA (practising) and Dominic K. F. Chan & Co.

Complaint: Failure or neglect to observe, maintain or otherwise apply 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.

Chan is the sole proprietor of Dominic K. F. Chan & Co. which issued an unmodified auditor’s opinion on the consolidated financial statements of a Hong Kong listed company, Art Textile Technology International Company Limited (now known as Art Group Holdings Limited), and its subsidiaries for the year ended 30 June 2015.

The Institute received a referral from the Financial Reporting Council about irregularities in the audit of the company’s financial statements. The financial statements disclosed basic and diluted loss per share that incorrectly included profits attributable to non-controlling interests. In addition, the diluted loss per share wrongly took into account potential ordinary shares which had an anti-dilutive effect. As a result of the errors, there was non- compliance with Hong Kong Accounting Standard (HKAS) 33 Earnings Per Share. In their audit, the respondents failed to identify the incorrect amounts of loss per share disclosed in the financial statements.

Decisions and reasons: The respondents were reprimanded and were ordered to pay a penalty of HK$80,000 and costs of disciplinary proceedings of HK$36,630. When making its decision, the Disciplinary Committee considered that loss earnings per share reflect the performance of a company and are key indicators for steering equity investment decisions, so accuracy is crucial. The committee further noted that the respondents had a past record of non-compliance with professional standards in reporting on a listed company’s financial information.

Resolution by Agreement

Kwok Kwan Hung, CPA (practising)

Complaint: Failure or neglect to observe, maintain or otherwise apply the fundamental principle of Professional Competence and Due Care in sections 100.5(c) and 130 of the Code of Ethics for Professional Accountants.

Kwok was an executive director and the chief financial officer of Sage International Group Limited, a Hong Kong listed company. He supervised the company’s financial reporting team and was responsible for preparing the group’s consolidated financial statements for consideration and approval by the board of directors. The group’s audited consolidated financial statements for the year ended 31 March 2011 and nine months ended 31 December 2011 contained material errors in the accounting of assets and liabilities acquired in two acquisitions, several convertible bonds issued by the company and the company’s share options and warrants. The errors represented breaches of HKAS 39 Financial Instruments: Recognition and Measurement, Hong Kong Financial Reporting Standard (HKFRS) 2 Share-based Payment and HKFRS 3 Business Combinations.

Regulatory action: In lieu of further proceedings, the Council concluded the following action should resolve the complaint:

  1. Kwok acknowledges the facts of the case and his non-compliance with the relevant professional standards; and
  2. Kwok be reprimanded and pay the Institute’s costs of HK$10,000.

Details of the disciplinary findings and guidelines for the Resolutions by Agreement are available at the Institute’s website: www.hkicpa.org.hk 

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July 2019 issue
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