Imagine a university graduate who has decided to pursue accounting, despite not having any qualifications or background on the subject. Currently, that person would have to complete a lengthy – and often costly – conversion programme in accounting before they can join the profession – even if the graduate already has relevant knowledge and skills. The Hong Kong Institute of CPAs’ Qualification Programme (QP) is set to change this with its new iteration.
Since 1999, the QP has been a comprehensive training programme for those keen to become CPAs in Hong Kong. More than 22,000 students have graduated from the programme as of June this year. QP students must complete its four compulsory modules – Module A financial reporting, Module B corporate financing, Module C business assurance, Module D taxation – as well as pass a final examination and acquire three years of practical experience before becoming qualified CPAs and members of the Institute. In 2010, the programme was enhanced and saw two modules revamped and more emphasis placed on its interactive workshops. The new QP launches in three stages, starting with its new Associate Level in June 2020, Professional Level in December 2020 and Capstone Level in June 2021.
A trusted programme
The Associate Level is one of the biggest changes coming to the programme. Its 10 new modules, which touch upon accounting fundamentals such as financial accounting, finance, audit, law and tax, will offer an opportunity for students with different educational backgrounds, including sub-degree holders and non-accounting majors, to become CPAs.
The new level is a welcome change to the QP’s curriculum, according to Jonathan Ng, Executive Director of Qualification and Education at the Institute. “Currently, the QP only accepts accounting graduates – the one-size-fits-all conversion programme cannot cater to students from different education backgrounds, which we found to be restrictive,” he says.
Ng played a key role in developing the improvements to the QP based on consultations with various bodies, employers, academia, firms and stakeholders. The Institute commissioned two independent consultants, namely the Institute of Chartered Accountants of Scotland (ICAS) and Deloitte to determine which areas of the programme needed to be revamped, and ensure it meets the highest of international accounting education standards and best practices. “The ICAS looked at the entire CPA qualifying process – from the admissions, examinations to the practical experience,” says Ng. “They produced a report to the examinations board with recommendations, which I saw as a holistic gap analysis in terms of what the QP needed to improve on.”
With the report and further consultations with Deloitte, the Institute put together its CPA Competence Blueprint. “We compared the blueprint against international accounting education standards, such as those of the International Federation of Accountants, of whom we are a member body, and also with the Global Accounting Alliance Recognition Framework, of whom we are a founding member. We want to make sure our qualification remains on par with them,” Ng adds. The Institute also received feedback following meetings with various stakeholder groups such as the government, academia, employers, members and students to identify the key attributes future accountants require. “We carefully mapped out the core competences the various stakeholder groups wanted to see in future accountants,” he says.
A platform to perform
With the new QP, students who hold relevant qualifications entering the Associate Level do not need to take each and every associate module. For example, a business graduate who has basic accounting knowledge may take any of the modules to brush up on areas they feel necessary. “The Institute will vet a student’s academic transcript and determine which associate module or modules they may obtain an exemption,” Ng explains. The Associate Level is specially-designed to accommodate business graduates and non-accounting students, who are equipped with the QP course materials from the Institute and can engage in self-study prior to starting the programme. “This is why we have designed the Associate Level as 10 bite-sized modules. We want to offer students the flexibility to take the associate modules as they wish.”
Zhaoyang Gu, Professor of Accountancy and Director of the School of Accountancy at the Chinese University of Hong Kong (CUHK), agrees the new QP will attract a wider range of graduates to the programme. “In the past, there were certainly some designated ways, which was good in terms of formal training. But now, there is added flexibility and pathways for more people who aspire to become CPAs,” he adds.
He says the university has always been committed to providing students with the necessary expertise to prepare them for the QP, adding how roughly 70 percent of all accounting undergraduates from CUHK end up taking on the QP following graduation. “We lay a strong foundation for our students, so when they choose to pursue something greater afterwards, they will have the ability to learn those skills.”
“The Institute will vet a student’s academic transcript and determine which associate module or modules they may obtain an exemption.”
Gu believes that while the new QP might mean slightly fewer students opting for accounting courses at universities, the programme will benefit the profession as a whole. “Our students have been doing very well in the QP and the new programme is also great news for non-accounting students,” he says. “The new QP reflects how the profession continues evolving over the past two decades.”
As an employer, Edmund Wong, Practising Director at Patrick Wong CPA Limited, is also enthusiastic about the new additions. “The Associate Level modules and examinations are developed and administrated by the Institute, so there is quality assurance,” Wong says. He adds many small- and medium-sized firms receive job applicants from non-accounting backgrounds, and says he looks forward to the new QP creating more talent for the profession as a whole. “When hiring, we look to employ graduates who already have sufficient accounting knowledge, as it requires time and resources to train a non-accounting graduate to become a professional from the ground up,” he says. “Because of this, we’ve been facing a rough time finding the right graduates in the last few years.”
The Associate Level will lay a solid foundation for students to build their accounting and business knowledge, Wong adds. “Module 6 financial accounting and Module 8 principles of auditing are very useful, as financial reporting and auditing are fundamental to all accounting firms,” he says, adding how Module 9 principles of taxation, will also give students a head start. “Tax is also a very integral part of our business, and an important element of financial reporting. An accountant must be familiar with Hong Kong’s tax rules and how we can apply them when performing computations and interpretations. These are all basic requirements for any accounting professional.” A good understanding of business and company law, covered in Module 10, is also necessary, he notes. “Though accountants are not expected to be legal consultants, knowledge in company laws can help accountants to solve day-to-day problems.”
Skills beyond accounting
Suzanne Cheng, Chief Financial Officer of Hutchison Telecommunications Hong Kong Holdings Limited, expects future professional accountants in business to have strong analytical skills, especially when analysing financial information. “By interpreting figures, CPAs should be able to tell us the reasons and story behind numbers, such as whether an increase or decrease is caused by the company, customer behaviour or the economy, for example,” she says.
With knowledge attained from the Associate Level, Cheng notes, students can join accounting degree holders studying the new QP’s Professional Level. “CPAs would greatly benefit from the Professional Level, with its comprehensive coverage of technical areas and soft skills necessary for professional accountants working in business,” she says. “Knowledge in financial reporting and business finance will help you to communicate day-to-day operations in numbers. Professionals need to understand how to review, reconcile and interpret financial information that is given to them and see whether it complies with financial standards and listing rules,” adds Cheng. She is confident the new QP will equip students with both technical and soft skills to succeed in business after graduation.
As CFO of a telecommunications operator, Cheng is relied upon to ensure the financial health of the company. “In my day-to-day work, I need to fully understand the details as they will affect the overall financial impact of the company,” she says. “Any additions need to be critiqued to see how they will impact the profit and loss accounts and balance sheets of the company, and then clearly communicated to the bosses.” Because of this, Cheng stresses that communication skills are equally as important. “As accountants, we deal with a lot of people, so one needs to know how to effectively communicate their ideas and findings with anybody, especially when there is financial information involved.”
Wong agrees: “Accountants aren’t just those who face accounting figures all day. Much of the day-to-day work we do consists of facing and dealing with different people, such as lawyers, bankers and creditors. Therefore, communication and interpersonal skills are extremely important,” he says. “Accountants need to determine whether accounting figures are presented in a true and fair manner – as the figures themselves don’t tell you the whole story, but are interrelated with other figures. We then need to be able to communicate our findings with different parties.”
“Knowledge in financial reporting and business finance will help you to communicate day-to-day operations in numbers.”
Cheng explains how companies also expect CPAs to have the necessary IT skills to work more effectively and efficiently. “Many businesses like ours deal with a lot of data such as numbers and names nowadays, so we can’t just rely on spreadsheets anymore,” she says, adding how the company has since begun using data visualization tools to help with this. “Students must be open to new ideas and technologies, such as financial process automation or robotics,” she says. To address this, the new QP aims to upskill students in emerging technologies. Ng of the Institute adds how the use of technology in the workplace will be discussed more thoroughly during workshops. “We will feature case studies which incorporate the usage of current audit software,” he says. “We want the case studies to mimic the real world as closely as possible.”
Proficiency in all modules of the new QP is also essential to getting the most out of on-the-job training at a Big Four firm, notes Shirley Woo, Partner at Deloitte and Chairman of the Institute’s Qualification and Examinations Board. “CPAs working at the Big Four will receive added exposure to help them become more well-rounded,” she says. With firms today becoming increasingly focused on consulting services, Woo hopes QP students can apply their knowledge from the QP in both accounting and consulting roles. “We have rotation programmes where CPAs work in different departments such as the audit and tax teams for a period of time, and learn from each project. After that, we have them focus on advisory,” she explains. “Using the skills acquired from the new QP, CPAs will learn how to apply these skills in practical situations and also to provide advisory and solutions to our clients.”
Woo believes the new QP will also benefit professionals in other sectors, not just fresh graduates to acquire some accounting knowledge. “The programme might also attract chartered financial analysts, lawyers or even financial advisors who want added skills in accounting. They can simply take a few modules,” she says. “I often work with lawyers on initial public offerings, and believe that some knowledge in accounting would help us both work more efficiently, for example, when we are looking at accounts, or when accounting information is involved.”
Currently, students who complete the four modules need to pass a final exam before becoming CPAs. With the new QP, students who complete the Professional Level move on to the Capstone Level, the final stage of the programme, which consists of a comprehensive three-day workshop before the integrated final exam.
Woo explains how the Capstone Level aims to integrate a student’s knowledge across all modules. “The final workshops are designed to train the students’ mindset before the exam. We will ask them questions that can have multiple angles, and have the students work together as a group to find the answers together. This is important because we ultimately want to train accountants how to think and how to handle real-case scenarios,” Woo says.
Ng adds how a one to two-hour activity during the final three-day workshops might include a discussion on ethics such as handling ethical dilemmas, solving problems involving multiple accounting standards, or resolving conflicts within a group. “This will help to strengthen a student’s understanding of ethics and how they can take on situations in the real world,” he says. Woo agrees: “Employers don’t just look for technical competency – they expect accountants to have an ethical mind to demonstrate that they are qualified with integrity.”
“Employers don’t just look for technical competency – they expect accountants to have an ethical mind to demonstrate that they are qualified with integrity.”
The final exam will comprise one paper, instead of the current two, which students must complete under four hours. “We’re not just testing a student’s knowledge of theory – we want to test how students apply their knowledge from the four Professional Level modules during the three-day workshops and the final exam,” Woo adds.
Ng explains how the Institute has made the final exam more integrated and open-ended than the current exam. “For example, one of the questions might involve writing an internal memo to a partner explaining issues you have identified and how to solve them,” he says. “Another question might ask students to come up with a business proposal, but the proposal has to touch upon taxation issues, how to resolve them and how to deal with financial reporting standards.” He says the additions to the new Capstone Level would ensure that students ultimately meet all the desired requirements of the new QP before moving on. “This is the reason why we have a stronger emphasis on the Capstone Level. It’s the last hurdle before they can call themselves a CPA.”
The road ahead
The changes coming to the workshops not only impact students, but also the facilitators. “We are retraining the trainers to provide instant feedback, as we believe the students will benefit from this and in turn, apply the feedback into the next workshops,” says Ng. He adds how the workshops will move away from assessing students merely based on right or wrong answers, and instead, assess students based on the logic behind their answers as well as class participation. Woo adds that in addition to covering technical knowledge such as audit and tax during the workshops, the Institute hopes to cover more practical skills. “For example, we’d like to teach students how to think about audit procedures,” she says. “This is another area where the facilitators are being retrained.”
The Institute is also looking for more professionals to join the new QP as workshop facilitators. “For the final workshops, we’re looking for more CFOs and financial controllers with at least 10 years’ working experience to really share their experiences in the real world such as dealing with clients, interacting with auditors and negotiation skills,” says Woo. “This is what we want from the QP – for it to be a platform for younger accountants to learn from experienced professionals. We need people who can teach our QP students what an all-rounded CPA needs to be equipped with.”
Ng is thrilled about the coming launch of the new QP, and is confident it will equip the next generation of accountants with the expertise to not only adapt to changes but also take on challenges in an ever-changing profession. “We want future-ready accountants to have the agility to adapt and learn – learning never stops, it’s a lifetime skill. Once they learn this valuable skill from the QP, they’ll be able to adapt to changes,” he says. “We want to provide our students a qualification they are very proud of – because once they have the CPA qualification, they have a key to open up different doors. The skills are portable, and will improve employability whether working in practice or in business locally and internationally.”
The practical experience
Under the Institute’s Practical Experience (PE) Framework, students need to acquire at least three years of relevant experience under an employer or supervisor authorized by the Institute in order to fully qualify for membership. The Institute also introduced changes to its PE Framework in November 2018, such as providing students with more quality assurance of the Authorized Employer (AE) and Authorized Supervisor (AS) system, and improved online communication and transparency of documentation. “We have been working on a more structured framework to inform students how they can complete the practical experience, such as through finding an AE or AS to supervise them,” says Shirley Woo, Partner at Deloitte and Chairman of the Institute’s Qualification and Examinations Board.
The changes aim to foster more communication between the students and their supervisors. At the start of the practical experience period, the AE/AS and QP students are required to enter into a development commitment to determine their expectations and responsibilities. The QP student needs to maintain their online training records, which include a reflective statement for the supervisor to sign off each year. The supervisor needs to carry out interim and annual review meetings with the student. “With the IT system we are working on, students can complete and submit their training records every year, which helps them to keep track of their progress. We hope this helps students to liaise closely with their supervisors to see whether they are aware of their requirements and work on ways to acquire the skills they may not have yet developed,” says Woo.
In ensuring that QP students have the necessary skills beyond accounting, the PE Framework offers six areas of technical competences with three elements each, making a total of 18 technical elements. The elements are diverse and cover topics such as preparing financial reports, performing an audit engagement, appraising investments and insolvency and reconstruction. QP students need to complete one element in the area of Financial Accounting and Reporting plus three other elements. “We are trying to get the message through to students that accountants today are not just involved in traditional roles,” says Jonathan Ng, Executive Director of Qualification and Education at the Institute. “This is why we are opening recognized areas outside of the traditional roles for practical experience.”
The Institute will also equip QP students with soft skills by having compulsory elements such as professional scepticism, ethical principles, and interpersonal and communication as part of its practical experience requirements.
Those interested in taking their career to the next level may join the new QP’s June 2020 intake by applying through the Institute’s website. Deadline for application is 11 January 2020.