Live webinar: HKFRS 13 Fair Value Measurement
The live webinar on 9 June will cover the key principles in Hong Kong Financial Reporting Standard (HKFRS) 13, including special considerations on non-financial assets and liabilities, measurement of fair value of unquoted equity instruments and fair value disclosure requirements. It will also explain how those principles and requirements apply to certain specific examples. Speakers will also share the audit considerations on fair value measurement and practice review findings.
Live webinar on HKFRS 3 Business Combinations
The live webinar on 21 June will go through the recent amendments to HKFRS 3 which revise the definition of a business and introduce the optional concentration test. Speakers will share with participants the differences in accounting for business combinations and asset acquisitions, as well as common application issues of HKFRS 3. They will also provide an update on the development of related International Accounting Standards Board’s (IASB) projects.
E-learning on IFRS Interpretations Committee Agenda Decisions that are relevant to Hong Kong
This archived webinar covers several IFRS Interpretations Committee agenda decisions and tentative agenda decisions which may have wider implications in Hong Kong. It explains how the applicable principles and requirements in the International Financial Reporting Standard (IFRS) Accounting Standards apply to specific fact patterns.
IASB March 2022 podcast
In this podcast, IASB Chair Andreas Barckow and Executive Technical Director Nili Shah discuss the topics from the March IASB meeting. Topics discussed include primary financial statements, financial instruments with characteristics of equity, post-implementation review of IFRS 9 – classification and measurement, business combinations under common control and second comprehensive review of the IFRS for SMEs accounting standard.
IASB April 2022 podcast and update
The IASB has published a summary of discussions at its April meeting. Topics discussed include equity method, goodwill and impairment, post implementation review of IFRS 9 – classification and measurement, primary financial statements and third agenda consultation.
The podcast, with its chair and executive technical director highlighting the projects discussed during the meeting, is now available.
Q1 2022 IFRS Interpretations Committee podcast
In this podcast, the IFRS Interpretations Committee Chair and member of the IASB Bruce Mackenzie joins Technical Staff Member Patrina Buchanan to discuss activities to support consistent application of IFRS Accounting Standards in the first quarter of 2022. Topics discussed include demand deposits with restrictions on use arising from a contract with a third party, transfer of insurance coverage under a group of annuity contracts, negative low emission vehicle credits, lessor forgiveness of lease payments, special purpose acquisition company transactions – classification of public shares and accounting for warrants at acquisition, and IASB narrow scope projects.
IFRS Interpretations Committee April 2022 Update and agenda decision
The IFRS Interpretations Committee Update provides a summary of discussions at its April meeting. It has also published its agenda decision on Demand Deposits with Restrictions on Use arising from a Contract with a Third Party (International Accounting Standard 7 Statement of Cash Flows).
Audit and assurance
HKICPA resource centres
Access the resources and publications at the Institute’s revamped Auditing and Assurance Resource Centre which will keep you updated with the latest auditing and assurance pronouncements.
Also visit the Institute’s New and Major Standards Resource Centre for resources on new and major pronouncements that will come into effect soon, including quality management for firms and engagements and Hong Kong Standard on Auditing 315 (Revised 2019) Identifying and Assessing the Risks of Material Misstatement.
Recordings of the New Quality Management Standards Series
Register for the e-learning series which covers key requirements, applications and illustrated examples on how small and medium practitioners can meet the requirements of the new quality management standards.
IAASB modernizes its standard for group audits in support of audit quality
The International Auditing and Assurance Standards Board (IAASB) released International Standards on Auditing (ISA) 600 (Revised) Special Considerations – Audits of Group Financial Statements (Including the Work of Component Auditors). The revised standard addresses special considerations that apply to audits of group financial statements (group audits). Group audits are often more complex and challenging than single-entity audits because a group may have many entities or business units across multiple jurisdictions, and component auditors may be involved. The revised standard becomes effective for audits of group financial statements for periods beginning on or after 15 December 2023.
New IAASB fact sheet addresses engagement team definition
As part of the IAASB quality management project, the definition of “engagement team” was clarified and updated to improve quality management at the firm and engagement level.
The IAASB recently released a fact sheet addressing the clarified definition and its possible impacts, including recognition that engagement teams may be organized in a variety of ways such as across different locations or by the activity they are performing. The fact sheet also includes a diagram that walks users through who specifically is included and excluded.
New non-authoritative guidance on fraud in an audit of financial statements
The IAASB released a non-authoritative guidance – The Fraud Lens – Interactions Between ISA 240 and Other ISAs that illustrates the relationship and linkages between the captioned auditing standards when planning and performing an audit engagement and reporting thereon.
IAASB April board meeting
The audio recording of the IAASB April board meeting is now available.
IAASB’s latest eNews is now available, highlighting various activities going on in and around the IAASB.
ICAEW audit and assurance resources
The Institute of Chartered Accountants in England and Wales (ICAEW) has the following resources that may be of interest to members:
- Audit & Beyond April 2022 offers practical tips on auditors such as audit implications of the war in Ukraine; new resources for adopting ISA 540, risks from social media pitfalls etc.
- An online event series designed to help small and medium practices to implement the new quality management standards.
- A webinar recording on practical hints and tips when assessing and responding to the risk of fraud for small and medium sized audit firms.
- An ISAs online learning and assessment programme to gain a better understanding of ISAs and the audit process.
- Quality management: iterating for improvement discusses the new and revised quality management standards aimed at comprehensively and actively managing risks to quality, through greater accountability, improved focus on leadership and culture, and continuous improvement through a required monitoring and remediation feedback loop.
- What do audit quality risks look like? illustrates examples of external and internal quality risks that auditors should identify and mitigate before significant problems are created.
- Quality management: what the new standards mean? emphasizes the benefits arising from the new and revised quality management standards which will become effective soon and how they move from a reactive approach to a risk-based proactive managing approach to quality.
Institute members can subscribe to ICAEW’s International Standards for free to access a wide range of resources on auditing and ethics.
Invitation to comment
The Institute is seeking comment on the International Ethics Standards Board for Accountants’ (IESBA) Strategy Survey 2022 for the development of its strategy and work plan 2024-2027 by 8 June.
Revised non-assurance services and fee-related provisions of the Code
Register for the e-learning session which covers specific provisions of the revised non-assurance services (NAS) and fee-related independence standards of the Code of Ethics for Professional Accountants. The revisions significantly strengthen the guardrails around auditor independence in two important areas that have the potential to create incentives influencing auditor behaviour – NAS provided to audit clients and fees. They will come into effect in December 2022.
HKICPA Ethics Survey 2021
Access the Institute’s Ethics Survey report and video on recent findings to professional accountants’ perception of ethics, common ethical issues they face at work and their familiarity with the Code.
The April issue of A Plus also shared the Institute’s Ethics Committee’s comments on the importance of ethics in the accounting profession and recapped the survey findings.
Report on IESBA accomplishments for 2020-2021
IESBA released a report – Elevating Ethics and Independence Standards for a Complex World that showcases the significant progress that the IESBA has made on behalf of the public interest, provides an overview of the IESBA’s extensive stakeholder outreach efforts and information about its partnership with the International Federation of Accountants (IFAC) to promote awareness, adoption, and effective implementation of the Code as well as provides an overview of the IESBA’s Consultative Advisory Group.
Benchmarking international independence standards
The IESBA published the Benchmarking International Independence Standards Phase 1 Report: Comparison of IESBA and the U.S. SEC/PCAOB frameworks to promote awareness and further adoption of the Code. The report details the findings of a study comparing the independence provisions of the Code applicable to audits of financial statements of public interest entities (PIEs) with the relevant rules of the United States Securities and Exchange Commission (SEC) and the U.S. Public Company Accounting Oversight Board (PCAOB). Without making judgements as to the relative merits of the two independence frameworks, the report highlights the similarities and key differences between the Code and the SEC and PCAOB rules in areas of greatest interest to stakeholders, including the permissibility of non-assurance services to audit clients, fees, long association with an audit client, and business and financial relationships. The IESBA will consider the findings of the benchmarking analysis in developing its 2024-2027 strategy and work plan.
Alongside the detailed report, an abridged report is also published to provide an overview of the main similarities and differences, as well as an additional publication with further information on the background and objectives of the initiative.
Mindset and enabling skills of professional accountants
The current environment of rapid technological change impacts the way organizations operate and the accounting profession is also in the process of being transformed. A final publication in a four-part thought leadership series by the IFAC, Chartered Professional Accountants Canada and the Institute of Chartered Accountants of Scotland highlights the need for the profession to redefine its value proposition, build new skills for the future and complete a competence paradigm shift in order to remain relevant.
Global ethics board expands universe of entities that are PIEs
The IESBA released the revised definition of a PIE together with other revised provisions in the Code. The revised provisions specify a broader list of categories of entities as PIEs whose audits should be subject to additional independence requirements to meet stakeholders’ heightened expectations concerning auditor independence when an entity is a PIE. The revised PIE definition and related provisions become effective for audits of financial statements for periods beginning on or after 15 December 2024. Early adoption is permitted and encouraged.
IESBA quality management-related conforming amendments to the Code
The IESBA also released a number of conforming amendments to the Code as a result of the issuance of the IAASB’s suite of quality management standards. These conforming amendments will be effective as of 15 December 2022.
IFRS Foundation to establish ISSB presence in Montreal
On 6 April, the IFRS Foundation and Chartered Professional Accountants of Canada announced an agreement to establish the Montreal centre of the International Sustainability Standards Board (ISSB). The Montreal centre will host key functions on behalf of the ISSB, including the coordination of activity across the Americas.
ISSB establishes working group to enhance compatibility between global baseline and jurisdictional initiatives
On 27 April, the ISSB announced the formation of a working group of jurisdictional representatives to establish dialogue for enhanced compatibility between the ISSB’s exposure drafts that are currently open for comment and ongoing jurisdictional initiatives on sustainability disclosures. The formation of the working group is part of an extensive programme of outreach activity designed to encourage feedback on and engagement with the ISSB’s consultation from all jurisdictions and stakeholder groups.
Webinars on the ISSB’s exposure drafts
The recordings of the ISSB webinars on its proposed standards on general sustainability-related disclosures and climate-related disclosures are now available.
SFC proposes changes to the position limit regime
The Securities and Futures Commission (SFC) launched a consultation, on 26 April, on proposed changes to the position limit regime for listed futures and options contracts. The key proposal is to set out how the statutory prescribed limits and reporting requirements should be applied to unit trusts and sub-funds under an umbrella fund.
The submission deadline is 27 June. Please refer to the press release for details.
Annual meeting with the IRD
The annual meeting between representatives of the Institute’s Taxation Faculty Executive Committee and the Inland Revenue Department (IRD) took place on 13 May. At the meeting, the IRD confirmed the extended due dates for lodging profits tax returns for the year of assessment 2021/22. These are:
The meeting minutes of the 2021 annual meeting are available on the Institute’s website.
Announcements by the IRD
Members may wish to be aware of the following matters:
- Employer’s Return of Remuneration and Pensions.
- Government welcomes passage of tax concessions.
- Secretary for Financial Services and the Treasury’s opening remarks on public finance and financial services at the Legislative Council (LegCo) Finance Committee special meeting.
- LegCo question on development of green finance.
- LegCo question on promoting switch to electric taxis among taxi trade.
- LegCo question on consolidating Hong Kong’s status as international financial centre.
- IRD’s notice on the tax obligations of taxpayers and employers.
- Fraudulent SMS message purportedly issued by IRD.
- IRD to largely resume normal public services.
- Government starts legislative process on tax deduction for domestic rent.
- Stamp Duty statistics.
Legislation and other initiatives
Announcements by the government
Members may wish to be aware of the following matters:
- Distancing measures easing.
- Apply for deferral of payment of rates and/or Government rent for Specified Commercial Premises by respective deadlines.
- Chief Executive welcomes LegCo’s passage of government’s funding application on 2022 Employment Support Scheme.
- Judiciary rolls out integrated Court Case Management System for court users.
- LegCo to resume physical meetings and arrangements of Secretariat’s public services.
- Companies Registry to resume normal public services starting from 19 April.
- Post offices to resume normal business hours.
- Court registries to resume normal operating hours and special ticketing arrangements to cease shortly.
- LegCo Secretariat releases Research Brief on “The 2022-2023 Budget.”
- Hong Kong’s latest foreign currency reserve assets figures released.
- LCQ10: Solicitors practising as a solicitor corporation.
- Land Registry releases new Street Index and New Territories Lot/Address Cross Reference Table.
- Provisional financial results for the year ended 31 March 2022.
- Exchange Fund Abridged Balance Sheet and Currency Board Account.
- LCQ7: Cross-boundary Wealth Management Connect Scheme in Guangdong-Hong Kong-Macao Greater Bay Area.
- Mainland Judgments in Civil and Commercial Matters (Reciprocal Enforcement) Bill to be introduced into LegCo.
- Gazettal of three pieces of subsidiary legislation for commencement of new regulatory regime of accounting profession.
- Revisions to election arrangements of Council of Hong Kong Institute of CPAs.
- Economic situation in first quarter of 2022 and latest gross domestic product and price forecasts for 2022.
- Government announces subscription and allocation results of retail green bond.
- General holidays for 2023 published.
- Hong Kong Property Review 2022 available online.
- Judiciary rolls out integrated Court Case Management System.
IFAC and ICAEW highlight the tools accountants can use to fight money laundering in latest installment of collaborative thought leadership series
On 27 April, the IFAC, together with ICAEW, released the latest installment in its Anti-Money Laundering: The Basics educational series: Installment Nine: Tools to Fight Back, which examines the tools professional accountants have at their disposal to address money laundering once it’s suspected.
The publication is part of a series helping accountants enhance their understanding of how money laundering works, the risks they face, and what they can do to mitigate these risks and make a positive contribution to the public interest.
The following regulations were gazetted on 14 April:
- United Nations Sanctions (Afghanistan) Regulation 2012 (Repeal) Regulation.
- United Nations Sanctions (Afghanistan) Regulation 2022.
- United Nations Sanctions (Somalia) Regulation 2019 (Amendment) Regulation 2022.
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