Opportunity amid change

Jemelyn Yadao
Alex Leung

A new chapter for the Institute has started, amid challenges such as the ongoing COVID-19 pandemic and opportunities such as the growing importance of sustainability in business. Institute President Loretta Fong talks to Jemelyn Yadao about how the Institute – in its redefined role – will ensure the profession continues to contribute to Hong Kong’s success, and the opportunities for members in what she has coined the era of “Accounting²”

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Jemelyn Yadao
Alex Leung


In 1972, after more than six years of planning, and driven by an increasing demand for trained accountants as Hong Kong was burgeoning, it was finally time to move ahead with legislation that would give a new body statutory powers to govern the city’s accounting profession. The bill was debated in the second half of that year. Graham Sneath, the Hong Kong solicitor-general, told the Legislative Council: “The main purpose... is to establish in Hong Kong a society of accountants, and to give it statutory responsibility not only for maintaining a register of duly qualified accountants and for regulating their professional conduct and practice, but also for their training and examination.”

On 1 January 1973, the Hong Kong Society of Accountants – now the Hong Kong Institute of CPAs – came into being. Fifty years on, the Institute’s President Loretta Fong reflects on that long-standing purpose of the organization. “Our primary purpose is to train accountants and to contribute to society, not to discipline members,” she says.

To Fong, it’s an important reminder, particularly as the Institute’s key roles and responsibilities have been brought into question amid the further reform of the regulatory regime of the profession. While the Institute’s regulatory powers, including the issuance of practicing certificates, have been transferred to the Accounting and Financial Reporting Council (AFRC), the Institute continues to shoulder the responsibility of registering CPAs, oversee the training and development of the accounting profession in Hong Kong through the Qualification Programme (QP) and continuing professional development (CPD) programme, as well as fulfil the crucial function of standard setting for the profession.

“There have been many times when people ask me, ‘What is the Institute going to do after the reform?’ I think the Institute has been overshadowed by its disciplinary power. People remember that it is a disciplinary body, but forget about all the good things the Institute is doing to contribute to society – how many younger generations of accountants we have trained, and how we have continuously played a supportive role in the growth of the Hong Kong economy and its capital market,” says Fong.

The reform has only driven the Institute to redefine its role towards better serving its members, and the profession as a whole. This year, the Institute will continue working on meeting the objectives of its Strategic Plan 2022, which had been refocused around three key topics as part of its repositioning: “Delivering member value,” “Proud to be a CPA,” and “Advocacy for the profession.”

Fong says the profession has navigated this significant paradigm shift as a collective. Throughout the journey of regulatory reform, effective member engagement has been critical in getting members up to speed with the changes to the legislation, and to relay their concerns to the government, she notes. Transitional arrangements ahead of the implementation of the new regime were also put in place. “The relevant members’ information has been transferred to the AFRC in a secure and efficient way. From the initiation to the effective transfer, this has been done successfully in just four months,” she says.

Loretta Fong, President of the Hong Kong Institute of CPAs, is also ESG Services Leader at PwC Hong Kong.
A meaningful role 

The Institute has been spearheading climate and sustainability initiatives in the past year, and raising awareness on these topics within the profession. But moving forward, members can expect the Institute, in its redefined role, to go even further. 

In May 2022, the Institute received confirmation from the Financial Services and the Treasury Bureau that the extant Professional Accountants Ordinance provides the statutory authority for the Institute to issue sustainability standards in Hong Kong. This is especially significant given the great anticipation towards the global baseline standards, which will be issued by the International Sustainability Standards Board (ISSB). “We’ve been given the green light from the government for us to set the sustainability standards here in Hong Kong,” says Fong. “Localizing the ISSB standards would be a very important task for us.” She adds that the Institute taking on the role of the local sustainability standards setter is only logical – it can leverage its experience and expertise in making international accounting standards suitable for Hong Kong-context. 

After the ISSB issues its final standards, which are expected in early 2023, the Institute can then start to look into how to make the standards work for the Hong Kong market, says Fong. “If we’re talking about using ISSB standards, how soon should we adopt them? Will certain industries start implementing first? Another thing to think about is whether and when private companies in Hong Kong should use that set of standards and with any modifications,” notes Fong. 

She highlights that the European Union’s Corporate Sustainability Reporting Directive, passed last June, requires companies meeting certain thresholds to report on sustainability matters. “It is just the global trend that more sustainability data is demanded by the investment community.”


As ESG Services Leader at PwC Hong Kong, Fong knows very well that environmental, social and governance (ESG) reporting is fast becoming an essential skill for accountants. She believes in the current and future opportunities for accountants to help companies successfully integrate sustainability into their operations and enhance transparency on sustainability. “[Sustainability] is a very big thing for the accounting profession. If we do this well, we can enhance the value of accountants to society.”

Fong points out that accountants are used to using a general ledger to monitor a company’s financial activity, and this experience will likely enable them to set up the internal control framework including systems for monitoring and reporting non-financial performance data, such as those related to ESG. “Most of the corporations currently do not have any robust system for capturing non-financial data such as carbon emissions, energy consumption, water usage, etc. A system allows the capturing of such data and appropriate internal control over the system is essential for ensuring that the data is correct. For financial data, the people doing this are accountants. Accountants can just apply those skill sets when it comes to non-financial data,” she says.

Indeed, it is already the case in some companies whereby “ESG controllers” with accounting backgrounds have been appointed to impose the kinds of internal systems used to produce financial statements, reported the Financial Times recently. CPAs have been appointed to new ESG or sustainability controller roles at the oil services company Halliburton and Google’s parent company, Alphabet.

“[Sustainability] is a very big thing for the accounting profession. If we do this well, we can enhance the value of accountants to society.”

Fong often thinks about the intersection between accounting and sustainability, and describes integrated reporting as Accounting²“It’s not Accounting 2.0 because the relationship is not linear, it’s multi-dimensional,” she says. “You have the financial and nonfinancial factors. So when you do the assessment, you need to look at both axes. It’s getting so complex that accountants, especially those who have been in the profession for around 20 years like me, know now that it’s the time to step up their efforts to learn and change.”

With career opportunities in sustainability for accountants to grasp, the Institute is focused on upskilling members and students with the necessary skills and knowledge, particularly through its CPD programme. “There’s going to be a lot more focus on sustainability. While we have done a few courses on ESG last year, there are many courses on these topics outside of the Institute, so I think we need to think about how to do them better and in a more structured way,” she says.

On the topic of CPD, Fong points out that the Institute revamped its Professional Development Strategy following its training needs analysis exercise last year, which found that training categorized by competencies is the most preferred among different member groups. The Institute, in response, enhanced its training by competencies structure for core subjects, including accounting hot topics, audit quality, ESG, ethics, integrity and professionalism, and valuation. “We redesigned the strategy so that members know which courses are suitable for their individual needs and capabilities,” she explains. The Institute also recently launched two new training curriculums – one on digitalization and one on soft skills.

Fong adds that CPD courses have also been strategically split up into two groups: courses that cover more general topics, for example accounting updates and audit updates, offered at a reduced rate; and courses that focus on strengthening skills in specialist fields. “We also offer training courses for junior accountants, aimed at small firms that may not have the resources to run training programmes for new recruits,” she says.

Supporting small- and medium-sized practitioners (SMPs) in carrying out digital transformation is particularly crucial. “SMPs say they’re digitalizing audit work papers but there are so many service providers. So over the past year, we have been running webinars introducing them to the different products out there,” says Fong.

Under the Institute’s redefined role, Fong believes it is critical for the Institute to focus its efforts on supporting members for the betterment of the profession.
Re-engineering the QP

Equipping members with the relevant skills and knowledge for a successful career is of the upmost importance to the Institute, so it has enhanced training in another way. The Institute is reviewing the QP to ensure the content remains effective in supporting student members’ career advancement and meets the evolving market needs. Changes to the practical experience component of the QP have already been made. In December 2022, a revised Practical Experience Framework was launched with the aim of enhancing the flexibility of time requirements to suit different work environments; strengthening the quality assurance of the Authorized Employers and Authorized Supervisors system; and promoting communication and improving the transparency of practical experience documentation through a new dedicated online system.

Fong notes that the QP is also being re-engineered to better reflect what is expected of accountants today, by putting an emphasis on areas such as soft skills, digitalization, and specializations. “Because of the fact that there are so many different things that an accountant could focus on, I think we may put more effort into building up specializations,” she says. “We have over 47,000 members, and around 90 percent of them are not practising accountants. Some are in corporate finance, some are working in consulting, and some are running operations in large organizations. Accounting is just the base of what you need in the business world.”

“I want society to remember that accountants have actually helped Hong Kong become the international financial centre it is today, and we continue to have a role in this.”

With a great number of members already thriving in specialist fields as true “Accountants Plus,” the Institute’s strategy of communicating the message “Proud to be a CPA” is all about putting these CPAs under the spotlight and showing the public how accountants can succeed in the business world. Fong says that the Institute has recently launched a TV series in collaboration with ViuTV to promote the diverse careers open to those with a CPA qualification. “These are the sort of soft public advertisements that we are trying to do. I want society to remember that accountants have actually helped Hong Kong become the international financial centre it is today, and we continue to have a role in this.

Thriving amid change

With the Institute celebrating its 50th anniversary this year, Fong looks back at how far the Hong Kong profession has come and how the role of CPAs has evolved immensely. “At the time since we established in 1973, and into the 1980s for 20 years, many Chinese enterprises, including state-owned enterprises and entrepreneurs, were getting listed in Hong Kong which led to a big boom in Hong Kong’s capital market, so there was an opportunity for accountants to play a key role here. That’s why we trained accountants and continued to train so many over the last 50 years,” she says. “At the same time, the profession has faced rapid changes.”

She highlights the growing prevalence of digital transformation, sustainability and the ever-changing regulatory landscape as being some of the trends that have impacted the profession. “I remember when I was a student of the Institute, and I had a few small A5-sized red binders with all the audit and accounting standards. It’s a very different world now.” Fong encourages members to stay tuned for announcements on the Institute’s 50th anniversary celebrations.

Despite the past year being full of changes, and the transition work on the new regulatory regime still being carried out, Fong is excited about this new era for the Institute. She believes that in its redefined role, the Institute is on track to achieving its strategic goals and will play an even bigger supportive role for members throughout their professional lives.

“Our success will depend on how others view the Institute. In the coming year, I hope our initiatives or changes that we make will attract more young talent, which we need for the profession to strive and grow. Seeing how ‘Accounting²’ rolls out will be very exciting.”

In May 2022, the Institute received confirmation from the Financial Services and the Treasury Bureau that the extant Professional Accountants Ordinance provides the statutory authority for the Institute to issue sustainability standards, paving the way for the Institute to become the local sustainability standard setter.

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