Young Members Conference to explore “more than accounting” career options
The Institute’s annual Young Members Conference will take place on 23 November. With the theme of “Out of the box – options for young accountants,” the event aims to keep young CPAs updated on issues relevant to the profession, and provide practical advice and insight for their career development.
Attendees will hear from a mix of young and seasoned speakers from different fields, who will talk about their experience working outside Hong Kong or in specialisms other than accounting and auditing. Recruitment consultants will also be there to offer young members tips on career planning and walk through the current job market.
Young members will also be able to network with the speakers, consultants and their fellow members at the three- hour conference. Enrolment deadline is 18 November. More details are available on the Institute’s website.
2019 SMP Symposium
The 2019 SMP Symposium, organized by the Institute’s Small and Medium Practices Committee, will be held on 29 November. It will provide SMPs an update on the recent development of the Institute and International Federation of Accountants; taxation matters; major financial reporting and auditing standards affecting SMPs; trust or company service provider licensing regime and anti-money laundering and counter-financing of terrorism requirements; audit data analytics; and practice review and compliance matters. Those interested should enrol by 22 November.
Annual Dinner 2019
Join the Institute’s Annual Dinner on 2 December to experience a fun-filled evening of live entertainment and dining at the Hong Kong Convention and Exhibition Centre. This year’s theme is “Together We Shine,” representing the Institute’s commitment to nurturing the next generation of accountants. Sign up before 8 November to enjoy an early bird discount. More details can be found on the Institute’s website.
Five teams led by Juni Ngai (team number 8158), Ellen Cheng (8157), Ronald Wong (8031), Percy Poon (0066) and Pearl Chau (0065), will represent the Institute in the Oxfam Trailwalker this year. Give your support by searching for the team number and making donations on the Trailwalker website: www.oxfamtrailwalker.org.hk.
The renewal notice for 2020 will be emailed to members and CPA practices in mid-November, enabling them to renew online through MyCPA. The annual fee will be waived in full for members whose names were on the register at 31 December 2017, however they will still need to submit their continuing professional development declaration to renew their membership.
Council minutes from the September Council meeting are now available to read. They can found in the Members’ area on the Institute’s website.
Ho Pak Tat, CPA (practising), Yuen Suk Ching, CPA (practising) and HLM CPA Limited
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.
HLM expressed an unmodified auditor’s opinion on the consolidated financial statements of a Hong Kong listed company, Chinese Energy Holdings Limited, and its subsidiaries for the year ended 31 March 2015. Ho was the engagement director and Yuen was the engagement quality control reviewer.
The Institute received a referral from the Financial Reporting Council about irregularities in the audit. Loss per share was misstated as a result of including the effect of the company’s offer of shares which was still open at the date of issuance of the financial statements and therefore should not have been taken into account under Hong Kong Accounting Standard 33 Earnings Per Share. In their audit, the respondents failed to identify the error and ensure the loss per share was properly disclosed in the consolidated financial statements.
Decisions and reasons: The respondents were reprimanded. The Disciplinary Committee further ordered Ho, Yuen and HLM to pay penalties of HK$50,000, HK$100,000 and HK$100,000 respectively. In addition, the respondents were ordered to pay costs of disciplinary proceedings of HK$99,269. When making its decision, the committee noted that Yuen and HLM had disciplinary records concerning listed company audits when HLM previously operated as a firm. This demonstrated their persistent failure to comply with professional standards. The committee further noted that earnings or loss per share is one of the most basic pieces of financial information of listed companies, and the significant misstatement of this information rendered the breach serious.
Ernst & Young and Wu Kwok Keung, Andrew, CPA
Complaint: Failure or neglect to observe, maintain or otherwise apply Statement of Auditing Standards (SAS) 100 Objective and General Principles Governing an Audit of Financial Statements, SAS 230 Documentation and SAS 400 Audit Evidence.
Ernst & Young (EY) expressed unmodified auditor’s opinions on the consolidated financial statements of Moulin Global Eyecare Holdings Limited (formerly known as Moulin International Holdings Limited), a Hong Kong listed company, and its subsidiaries (collectively group) for the nine months ended 31 December 2002 and for the year ended 31 December 2003. Wu was the engagement partner of the audits.
In 2005, trading of the group’s shares were suspended and provisional liquidators were appointed for the company after it defaulted on repayment of its bank loans. The liquidators uncovered apparent accounting irregularities and certain senior personnel of the company were arrested. Having considered the available information, the Council of the Institute directed an investigation under the Professional Accountants Ordinance (Cap. 50) be conducted into EY’s audit of the group’s financial statements for the year ended 31 December 2003. The investigation was subsequently delayed because the Institute was prevented from obtaining the audit working papers while criminal investigation and legal actions taken by the liquidators were ongoing.
In 2008, the Council considered information revealed in the liquidators’ legal actions and expanded the scope of the investigation to cover EY’s audit of the group’s financial statements for the nine months ended 31 December 2002. The Council also directed an investigation be undertaken into the conduct of certified public accountants responsible for the preparation of the group’s financial statements during the relevant periods. An Investigation Committee was subsequently formed and investigation work commenced on these certified public accountants as well as the group’s auditors. The departure of audit staff and seizure of certain audit working papers by relevant authorities affected the progress of the investigation against EY.
In November 2017, the Investigation Committee completed the investigation of EY and found that the respondents would have a case to answer regarding audit deficiencies in the areas of the group’s sales, tax liabilities, and loans and prepayments to third parties.
On the basis of the findings set out in the report of the Investigation Committee, a complaint was lodged against the respondents under section 42C(1) of the ordinance.
Decisions and reasons: EY and Wu were reprimanded. In addition, the Disciplinary Committee ordered EY and Wu to pay penalties of HK$350,000 and HK$100,000 respectively. Further, the respondents were ordered to jointly pay costs of disciplinary proceedings in the sum of HK$184,690. When making its decision, the committee considered the particulars in support of the complaint, the respondents’ personal circumstances and the parties’ conduct throughout the proceedings.
Details of the disciplinary findings are available at the Institute’s website.