Update no. 265 relates to the issuance of Practice Note (PN) 740 (Revised) Auditor’s Letter on Continuing Connected Transactions under the Hong Kong Listing Rules. The PN has been revised to provide practical guidance for auditors when reporting on a listed issuer’s continuing connected transactions under the Listing Rules issued by the Stock Exchange of Hong Kong.
Invitation to comment
The Institute is seeking comments on the International Accounting Standards Board (IASB) Request for Information Post-implementation Review of IFRS 9 – Classification and Measurement by 3 December. The request for information seeks feedback on applying the classification and measurement requirements of International Financial Reporting Standard (IFRS) 9 Financial Instruments and related disclosures. Members are also invited to participate in the Institute’s roundtable on 16 November to share their views.
The Institute has submitted comment letters on:
- IASB Request for Information Third Agenda Consultation.
- IASB Exposure Draft ED/2021/8 Initial Application of IFRS 17 and IFRS 9 – Comparative Information.
Institute roundtable on IASB Exposure Draft Subsidiaries without Public Accountability: Disclosures
The Institute will hold a roundtable on 4 November on the IASB Exposure Draft Subsidiaries without Public Accountability: Disclosures, which permits eligible subsidiaries to apply IFRSs with a reduced set of disclosure requirements. Members attending the roundtable will be entitled to up to one CPD hour. Members can also submit comments by 17 December.
Institute workshops on HKFRS 17 Insurance Contracts
The Institute will hold a series of face-to-face workshops in November for professionals who have acquired an understanding of the basic principles of Hong Kong Financial Reporting Standard (HKFRS) 17 Insurance Contracts and now wish to develop a working knowledge of the standard:
- 11 November: General insurance – Deep dive application: application examples of measurement models, contractual service margin (CSM) calculation, and expense allocation.
- 12 November: General insurance– Reinsurance, presentation and disclosures, interaction with other standards, highlights of the June 2020 amendments, and practical insights.
- 19 November: Life insurance – Deep dive application: application examples of measurement models, CSM calculation, expense allocation, and highlights of the June 2020 amendments.
- 22 November (half day): Life insurance– Reinsurance, contract boundary, presentation and disclosures, and practical insights.
Annual Accounting Update 2021 “You Gotta Move On”
At this Institute’s conference on 13 November, speakers will discuss common application issues of HKFRSs, newly and not yet effective HKFRS, the future of corporate reporting, and emerging issues including accounting for cryptocurrencies and special purpose acquisition companies.
Speech by the IASB Chair
Andreas Barckow, Chair of the IASB, delivered a speech at the World Standard-setters Virtual Conference. He reflected on his first three months in the role, discussed the IASB’s agenda in the upcoming years, and shared how the IASB could collaborate more with national standard setters.
IASB September podcast
In an September IASB podcast, IASB Chair and Vice-Chair highlight the projects discussed during the September meeting, including extractive activities, financial instruments with characteristics of equity, dynamic risk management, primary financial statements and goodwill and impairment. They also touch on the recent World Standard-setters Virtual Conference and the IFRS Foundation Trustees’ work on the proposed International Sustainability Standards Board.
September IASB update
The September IASB Update, highlighting the tentative decisions reached at the IASB monthly meeting, is now available.
September IFRS Interpretations Committee update
The September IFRS Interpretations Committee Update newsletter, summarizing the decisions reached by the committee, is now available.
September IFRS for SMEs Update
The September 2021 IFRS for SMEs Update that provides a summary of news, events and other information about the IFRS for SMEs standard and related small- and medium-sized entities (SME) activities is now available.
IASB investor perspective article
In an investor perspectives article, Nick Anderson, an IASB board member, discusses the new approach to develop and draft disclosure requirements in IFRS as proposed in the IASB Exposure Draft Disclosure Requirements in IFRS Standards – A Pilot Approach. The pilot approach responds to investor demand for better quality information in the notes to financial statements. Members can submit comments to the Institute by 26 November.
Auditing and assurance
Proposed new standard for the audits of LCEs
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 (LCEs) by 31 December. Members may be interested in the following:
- Taking part in the Institute’s survey, which highlights the key attributes of the exposure draft followed by yes/no questions. The survey can be found on the Standard Setting Department’s “What’s new” webpage.
- Participating in the Institute’s roundtable on 9 November to share views on the exposure draft. Members attending the roundtable will be entitled to up to one CPD hour.
- Viewing the IAASB LinkedIn livestreams.
- Using an optional response template.
Institute’s webinars on auditing and assurance
Join the following webinars in November to stay updated:
- 16 November: Industry update relating to licensed corporations.
- 18 November: Industry update relating to investment funds.
CPA Canada practitioner’s pulse guidance webinars
The following recorded webinars by CPA Canada provide updates to auditing and assurance in different areas:
- New suite of quality management standards.
- Understanding your client – COVID-19 implications for internal controls.
Updated quality management implementation guide
The IAASB released an updated version of the first time implementation guide for International Standard on Quality Management (ISQM) 1 Quality Management for Firms that Perform Audits or Reviews of Financial Statements, or Other Assurance or Related Services Engagements to provide further context and clarification to help stakeholders implement and evaluate its system of quality management.
The IAASB also released the first time implementation guide for ISQM 2 Engagement Quality Reviews in June. The suite of quality management standards will come into effect on 15 December 2022.
IAASB’s action to address the complexity, understandability, scalability and proportionality of the standards
The IAASB’s Drafting Principles and Guidelines have been developed to guide how the IAASB’s staff draft the standards. The IAASB is currently undertaking outreach with stakeholders to gather feedback on the document.
The IAASB September eNews is now available, highlighting various activities going on in and around the IAASB.
IAASB September board meeting
The audio recording of the IAASB September board meeting is now available.
ICAEW’s article on data in audit
An Institute of Chartered Accountants in England and Wales (ICAEW) article discusses how better data processing and management opens up new opportunities for auditors and could even help rebuild trust.
The Institute has submitted a comment letter on the International Ethics Standards Board for Accountants (IESBA) Exposure Draft Proposed Quality Management-related Conforming Amendments to the Code.
The third quarter, 2021 edition of the IESBA eNews is now available. It highlights various activities going on in and around the IESBA.
IESBA September board meeting
The meeting summary and audio recording of the IESBA’s September meeting is now available.
A4S Finance Leaders’ Sustainability Barometer
Accounting for Sustainability (A4S), of which the Institute is a member, has launched the A4S Finance Leaders’ Sustainability Barometer survey of chief financial officers and chief investment officers to track how attitudes to sustainability are changing. Complete the survey to help identify trends and ongoing gaps in terms of skills and actions.
Webcast on the Technical Readiness Working Group’s preparations for a sustainability standard board
The IFRS Foundation has published a webcast explaining the role of the Technical Readiness Working Group (TRWG), which was created by the foundation’s Trustees in March to do preparatory work for the proposed International Sustainability Standards Board. The webcast introduces the member bodies of the TRWG and provides a high-level summary of its work programme.
Official Receiver’s Office Circular No. 2/2021
The recently issued Official Receiver’s Office (ORO) Circular No. 2/2021, advises that to enhance communication with the ORO, and to promote greener practices, private insolvency practitioners and their staff are encouraged to make use of electronic communication in insolvency case matters.
SFC concludes consultation on anti-money laundering guidelines
The Securities and Futures Commission (SFC) released Consultation Conclusions on Proposed Amendments to (1) the Guideline on Anti-Money Laundering and Counter-Financing of Terrorism (For Licensed Corporations) and (2) the Prevention of Money Laundering and Terrorist Financing Guideline issued by the Securities and Futures Commission for Associated Entities. Please refer to the press release for details.
Announcements by the Inland Revenue Department
Members may wish to be aware of the following matters:
- Legislative Council question on Shenzhen-Hong Kong Innovation and Technology Co-operation Zone.
- Government responds to inclusion of Hong Kong in the European Union’s (EU) watch list on tax cooperation. See also the EU Council’s update on 5 October.
- Government welcomes passage of Securities and Futures (Amendment) Bill 2021 and Limited Partnership Fund and Business Registration Legislation (Amendment) Bill 2021.
- Stamp Duty statistics.
Legislation and other initiatives
Announcements by the government
Members may wish to be aware of the following matters:
- Government publishes Report on Hong Kong’s Business Environment: A Place with Unique Advantages and Unlimited Opportunities.
- Government welcomes launch of Southbound Trading under Bond Connect.
- Government maintains most social distancing measures under Prevention and Control of Disease Ordinance.
AML the essentials
AML the essentials, issue 22, published by the ICAEW, contains new United Kingdom government consultations, guidance on engaging in financial activity in Afghanistan, new suspicious activity reports resources and an inside look at the roles of experienced money laundering reporting officers for reference.
The United Nations Sanctions (Democratic Republic of the Congo) Regulation 2019 (Amendment) Regulation 2021 was gazetted on 24 September.
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