Institute’s webinar HKFRS 17 Insurance Contracts: An update in a nutshell
The webinar on 29 October will provide a high-level understanding of the basic requirements of Hong Kong Financial Reporting Standard (HKFRS) 17 Insurance Contracts. It will serve as a refresher course and cover some of the key aspects of the new standard. This webinar will also cover amendments to the standard that have changed some of the requirements, and which were approved by the Institute in late 2020 following the publication of Amendments to International Financial Reporting Standard 17 Insurance Contracts in June 2020.
New webpage: Presentation and disclosures of financial statements
The Institute has developed a new webpage which contains pronouncements, guides and articles that are relevant to the presentation and disclosures of financial statements for the following projects:
- Primary financial statements;
- HKFRS Practice Statement 2 Making Materiality Judgements;
- Disclosure of accounting policies; and
- Classification of liabilities as current or non-current.
IASB investor perspective article
Issue 24 of the International Accounting Standards Board (IASB) Investor Update highlights an interview with Philip Robinson, accounting specialist in the Corporate Finance Group at Moody’s Investors Service and member of the Capital Markets Advisory Committee. It also includes a reminder for papers that are open for consultation from the IASB.
Auditing and assurance
Invitation to comment
The Institute is seeking comments on the International Auditing and Assurance Standards Board (IAASB) Exposure Draft Proposed International Standard on Auditing for Audits of Financial Statements of Less Complex Entities (ISA for LCE) by 31 December. The proposed standard aims at focusing the work of auditors through requirements designed to be proportionate to the typical nature and circumstance of less complex entities. Members are also invited to:
- Take part in the Institute’s survey, which highlights the key attributes of the exposure draft followed by yes/no questions.
- Participate in the Institute’s roundtable on 9 November to share views on the exposure draft. Members attending the roundtable will be entitled up to one CPD hour.
To facilitate responses, the IAASB has prepared an optional response template.
Learn more about the proposed standard by reading the overview article from the International Federation of Accountants (IFAC) and the IAASB webpage.
Institute’s workshop on audit of licensed corporations
Join the workshop on 8 November to learn about audits of licensed corporations regulated by the Hong Kong Securities and Futures Commission (SFC). The workshop will cover:
- An overview of the Hong Kong Securities and Futures Ordinance requirements.
- Highlights and reminders on Practice Note 820 (Revised) The Audit of Licensed Corporations and Associated Entities of Intermediaries.
- New amendments of the Securities and Futures (Financial Resources) Rules for the preparation of financial returns.
- Sharing of key future developments in rules and regulations relevant to audit.
Recording of the Institute’s panel discussion webinar on audit quality
The webinar recording of a panel discussion on how a culture of challenge and professional scepticism can contribute to audit quality in firms is now available.
How long should firms keep their engagement documentation?
As required by Hong Kong Standard on Quality Management 1 Quality Management for Firms that Perform Audits or Reviews of Financial Statements, or Other Assurance or Related Services Engagements, firms should design and implement systems of quality management by 15 December 2022, including to maintain and retain engagement documentation appropriately. The Institute published a guidance which sets out factors for firms to consider when determining an appropriate retention period for engagement documentation.
Institute’s Auditing and Assurance Standards Committee meeting minutes
Minutes of the meeting held in July is now available.
2020 IAASB Handbook
The IAASB has released the 2020 edition of the Handbook of International Quality Control, Auditing, Review, Other Assurance, and Related Services Pronouncements. It includes ISA 540 (Revised) Auditing Accounting Estimates and Related Disclosures; conforming and consequential amendments from ISA 540 (Revised) to other standards; changes for the conforming amendments arising from the restructured International Code of Ethics for Professional Accountants (including International Independence Standards). It also includes standards which are not yet effective in the back of Volume 1 and 2.
Exploring the link between culture and high-quality audit
The Financial Reporting Council in the United Kingdom published a summary document from its recent Culture Conference held in June which explores a variety of themes namely building an audit firm culture that supports high quality audit; the role of audit committees; the importance of a culture challenge; embedding and measuring organizational culture; audit firm culture, audit quality and the role of the regulator.
ICAEW audit and assurance resources
The Institute of Chartered Accountants in England and Wales (ICAEW) has the following material that may be of interest to members:
- Financial Reporting, Audit and Assurance Conference: Join the virtual event on 11 and 12 October and explore how reporting and audit are transforming to strengthen the trust and to help build a sustainable future.
- Hot topics and tips for 2022 audit: Join the online webinar on 1 November aiming at helping small- and medium-sized audit firms get ready for the 2021/22 reporting season. It focuses on current topical issues and areas for improvement on audits into 2022 and top tips for auditing in post pandemic world.
- Audit and Beyond September 2021: Access to technical articles on application of ISA 540 (Revised); improving audit files; resources to help firms with their approach to quality management.
Institute members can also subscribe to ICAEW’s International Standards for free to access a wide range of resources on auditing and ethics.
Institute’s Ethics Committee meeting minutes
Minutes of the meeting held in June is now available.
Maintaining an ethical and supportive culture during remote working
An ICAEW article explores practical steps some firms have taken to ensure that an ethical and supportive culture is maintained while teams of staff work remotely.
New series of articles on ethical leadership
To help guide finance professionals to maintain ethical standards in a complex environment, the Chartered Professional Accountants of Canada, the Institute of Chartered Accountants of Scotland, and the IFAC have released a new publication series – Ethical Leadership in an Era of Complexity and Digital Change, focusing on ethical leadership that is crucial to the future success of the accounting profession and the global financial system as a whole.
Paper 1 of the series – Complexity and the professional accountant: Practical guidance for ethical decision-making – addresses the key themes presented in the exploratory work, leveraging discussions and recommendations featured in a recent global roundtable event, to offer practical guidance for finance professionals in the area of ethical leadership.
SFC’s consultation conclusions on climate-related risks in funds
On 20 August, the SFC released consultation conclusions on the proposed climate-related risk management and disclosure requirements for fund managers, together with amendments to the Fund Manager Code of Conduct (FMCC) and a circular setting out the expected standards for complying with the amended FMCC, including:
- Baseline requirements for all those managing collective investment schemes (CIS); and
- Enhanced standards for fund managers with CIS under management which equal or exceed HK$8 billion in fund assets for any three months in the previous reporting year. This represents an increase from the HK$4 billion threshold proposed in the consultation paper.
Please refer to the press release for details. The first phase of the new requirements will be implemented on 20 August 2022.
Please also refer to the Institute’s submission, which supported the SFC’s proposals in principle, while commenting on the details of their implementation.
Announcements by the Inland Revenue Department
Members may wish to be aware of the following matters:
- List of Qualifying Debt Instruments (as at 30 June 2021).
- Tax Guide for Charitable Institutions and Trusts of a Public Character.
- Legislative Council question on double taxation relief for income from international operation of ships.
- Legislative Council question on data relating to housing.
- Stamp Duty statistics.
Legislation and other initiatives
Announcements by the government
Members may wish to be aware of the following matter:
- Government welcomes formal launch of Cross-boundary Wealth Management Connect.
Gazetted list of terrorists and terrorist associates designated by the United Nations Security Council (UNSC), published pursuant to the United Nations (Anti-Terrorism Measures) Ordinance (Cap.575) was gazetted on 8 September. The List of individuals, groups, undertakings and entities published under section 25 of the United Nations Sanctions (ISIL and AI-Qaida) Regulation (Cap. 537CB) was updated on 7 September. See the relevant UNSC press release.
For the current lists of terrorists, terrorist associates and relevant persons/ entities under United Nations sanctions, members should refer regularly to the Institute’s AML webpage. Other useful documents and guidance can also be found on the same page.
Please refer to the full versions of Technical News on the Institute’s website: www.hkicpa.org.hk