Institute news

Institute’s 50th Anniversary Cup

The Institute kicked off its 50th anniversary celebrations with the 50th Anniversary Cup horse racing event on 7 June. Members and guests gathered to witness a special commemoration race dedicated to the Institute’s golden jubilee during the race meeting at the Happy Valley Racecourse.

Trophies were presented by Institute President Loretta Fong and Vice Presidents Roy Leung and Edward Au to the owner, trainer and jockey of the winning horse right after the race.

Around 200 guests, including Guests of Honour, Paul Chan, Financial Secretary, Wang Songmiao, Secretary General of the Liaison Office of the Central People’s Government in the HKSAR and Dr. Kelvin Wong, Chairman of the Accounting and Financial Reporting Council, attended the occasion. Visit the photo highlights on the 50th anniversary website.

Leadership visit to Beijing

Institute President Loretta Fong, Vice President Edward Au, and Chief Executive and Registrar Margaret Chan, represented the Institute’s leadership in a visit to Beijing on 29-30 May to meet with Chinese government authorities, regulators and the Institute’s counterparts.

The trip included a meeting with Dong Wang, Deputy Director-General of the Ministry of Finance’s Accounting Department, which was followed by meetings with representatives from the Chinese Institute of Certified Public Accountants and the China Securities Regulatory Commission.

Championing ethical leadership amid competing pressure

Global Accounting Alliance (GAA) sponsored the “Championing ethical leadership amid competing pressures” which was held on 11 May 2023 by Economist Impact. As one of the GAA member organizations, the Institute served as part of the organizing committee, and attended the event to share the latest development of Hong Kong accounting profession.

Increasingly complex external pressures, generational shifts and mounting societal expectations are driving leaders of organizations to continuously evaluate internal ethics frameworks and forge new pathways to tackle ethical dilemmas. Ethics is now extending beyond a company’s legal requirements, which leads to complex definitions and varying interpretations among different companies and individuals. This initiative aims to promote ethical behaviour and responsible practices among organizations, employees and stakeholders while considering their impact on society at large.

Representatives from European Union, Schneider Electric, United Nations and Edelman participated as the panellists to explore the challenges and opportunities that arise from upholding business ethics for organizations globally.

The full video can be viewed here. 

Educational publication on HKFRS 17 Insurance Contracts – Journal Entries

Hong Kong Financial Reporting Standard (HKFRS) 17 Insurance Contracts is a comprehensive new financial reporting standard on insurance contract accounting which became effective from 1 January 2023. The Institute has issued an educational publication, which explains the basic principles of the three measurement models in HKFRS 17 (i.e. General Measurement Model, Premium Allocation Approach and Variable Fee Approach) and provides illustrations of the journal entries for 10 simplified fact patterns of insurance contract transactions, showing how these journal entries map to the movements in the insurance contract liability and how they are reflected in the income statement. The backbone of the publication is built on the General Measurement Model followed by comparisons of its key differences with the other two models. This publication aims to help readers understand insurance contract accounting under HKFRS 17 “from the ground up” before tackling more complicated areas of the standard. In addition, for readers interested in gaining deeper understanding and knowledge of HKFRS 17, “Notes to further insights” are provided in relevant areas.

Council meeting minutes

The abridged minutes from the April, May and June 2023 Council meetings are now available.

Disciplinary findings

Leung Kam Man, Victor

Complaint: Failure or neglect to observe, maintain or otherwise apply the fundamental principle of professional competence and due care under sections 100.5(c) and 130.1 of the Code of Ethics for Professional Accountants; Hong Kong Standard on Quality Control (HKSQC) 1 Quality Control for Firms that Perform Audits and Reviews of Financial Statements, and Other Assurance and Related Services Engagements; Hong Kong Standard on Auditing (HKSA) 230 Audit Documentation and HKSA 500 Audit Evidence.

Leung was a sole proprietor of Chinaweal CPA & Co. (Chinaweal) and CWB CPA Limited (collectively the practices). He was responsible for the practices’ quality control systems and the quality of the practices’ engagements. A previous practice review on Chinaweal and Leung’s own name practice was conducted concurrently in 2013/2014 (previous practice review). The practices were subject to the present practice review which was concluded in August 2020.

In the present practice review, the reviewer found a number of significant deficiencies in the practices’ quality control systems and in the performance of a certain number of audit engagements, some of which were the same or similar deficiencies as identified in the previous practice review. As a result, two complaints were laid against Leung.

Decisions and reasons: Leung admitted to the complaints against him. The Disciplinary Committee reprimanded Leung and ordered that his practicing certificate be cancelled and shall not be issued for six months with effect from 20 June 2023. He was ordered to pay a penalty of HK$75,000 and the costs of the disciplinary proceedings of HK$140,265.

Wong Tai Wai, David

Complaint: Failure or neglect to observe, maintain or otherwise apply the fundamental principle of professional competence and due care in sections R110.2 and R113.1 under Chapter A of the Code of Ethics for Professional Accountants; HKSQC 1; HKSA 230; HKSA 500; HKSA 520 Analytical Procedures; HKSA 700 (Revised) Forming an Opinion and Reporting on Financial Statements; and HKSA 705 Modifications to the Opinion in the Independent Auditor’s Report.

Wong was practising in his own name with no staff (the practice). The practice was subject to a practice review (the review) on his audit engagement of a client, which was concluded in June 2020. The practice review reviewer (reviewer) identified a number of significant findings and deficiencies in the practice’s audit, which led to concerns over Wong’s lack of professional competence and due care. This was demonstrated by the practice’s insufficient quality control policies and procedures, deficient monitoring function, and lack of audit quality in the audit of the client. The reviewer’s report also revealed various failures on the part of Wong to perform audit design and planning and appropriate audit procedures, to obtain appropriate audit evidence, and to maintain an adequate system of quality control in various aspects.

Decisions and reasons: The Disciplinary Committee found that Wong had been guilty of professional misconduct. The committee reprimanded Wong and ordered that the name of Wong be removed from the register of CPAs for two years and his practising certificate be cancelled with effect from 20 July 2023. He was ordered to pay the costs of the disciplinary proceedings of HK$186,617.50.

Details of the disciplinary findings are available on the Institute’s website.