Local updates
Members’ handbook update no. 227
Update no. 227 relates to amendments to the Small and Medium-sized Entity Financial Reporting Framework and Financial Reporting Standard.
Q&As on recognition of IPO sponsor fee income
The Institute issued questions and answers on applying HKFRS 15 Revenue from Contracts with Customers to the recognition of initial public offering sponsor fee income.
Hong Kong Standard on Auditing and International Standard on Auditing comparison
Comparison between Hong Kong and international quality control, auditing, review, other assurance, and related services pronouncements effective as at 31 December 2018.
Invitations to comment
The Institute is seeking comments on:
- The International Auditing and Assurance Standards Board’s (IAASB) consultation paper on Proposed Strategy for 2020-2023 and Work Plan for 2020-2021 by 4 May.
- The IAASB’s exposure drafts on quality management for firms and engagements by 24 May.
Invitation to observe meetings of the Hong Kong Insurance Implementation Support Group
Register to observe meetings of the Hong Kong Insurance Implementation Support Group (HKIISG) which discusses hot topics on HKFRS 17 Insurance Contracts. Meeting schedule, papers and summaries can be found on the Institute’s website.
Professional accountants in business
HKEX consultation conclusions on proposed changes to documentary requirements and other minor rule amendments
On 1 February, Hong Kong Exchanges and Clearing (HKEX) published conclusions related to its Consultation Paper on Proposed Changes to Documentary Requirements Relating to Listed Issuers and Other Minor Rule Amendments which sought comments on proposals to simplify and streamline the administrative procedures involved in submission and collection of documents to enhance procedural efficiency. It also proposed minor listing rule amendments and a number of housekeeping amendments that involve no change in policy direction. The responses were broadly in favour of the consultation proposals. A summary of the main changes is set out in the press release.
The amendments came into effect on1March. In respect of the amended rules relating to streamlining of listed issuers’ filing requirements, they will be applied to issues of securities announced by listed issuers on or after 1 March.
Existing directors and supervisors of listed issuers are also reminded to submit their contact details as required under the amended rules to HKEX no later than 31 March.
HKEX review results of disclosure in issuers’ annual reports
On 31 January, HKEX published a report on the findings and recommendations from its review of issuers’ annual reports for the financial year ended between January and December 2017.
As part of its regulatory activities, HKEX undertakes two ongoing review programmes on issuers’ annual reports, namely, (i) Review of Disclosure in Issuers’ Annual Reports to Monitor Rule Compliance and (ii) Financial Statements Review Programme. Starting from 2019, the findings from both review programmes are consolidated into one review report to provide guidance on specific areas selected based on market trends, regulatory developments and HKEX’s observations of issuers’ compliance with regard to these areas.
Members – in particular preparers of listed company’s annual reports – are encouraged to read the report and follow the guidance to improve their annual reports to enhance transparency to their shareholders and ensure they comply with the listing rules.
COSO guidance for healthcare providers
Healthcare organizations experience issues with system access and integrity, clinical documentation, coding, and billing, all of which may result in potential non-compliance with relevant regulations – and costly mistakes.
The Committee of Sponsoring Organizations of the Treadway Commission (COSO), in collaboration with Crowe LLP and CommonSpirit Health, has recently published a new guidance entitled COSO Integrated Framework: An Implementation Guide for the Healthcare Provider Industry. The guide introduces healthcare organizations to COSO’s widely used “Internal Control – Integrated Framework,” and provides a roadmap to implementation to help strengthen their overall governance and internal control structures.
Small and medium practices
Ethical awareness in public practice
A distinguishing mark of the accounting profession is its acceptance of responsibility to act in the public interest. To assist members in understanding and maintaining standards set out in the Code of Ethics for Professional Accountants, the Institute’s Compliance Department has compiled a list of past cases which illustrate ethical issues encountered by the practitioners. This may serve as a guide for members facing challenging ethical issues.
Taxation
Announcements by the Inland Revenue Department
Members may wish to be aware of the following matters:
- 2019-20 Budget tax measures
- Passage of the Inland Revenue (Amendment) (No. 7) Bill 2018 (aligning the tax treatment of financial instruments with their accounting treatment and other changes)
- Passage of the Inland Revenue (Profits Tax Exemption for Funds) (Amendment) Bill 2018
- Refinements to Legislative Framework for Automatic Exchange of Information come into force
- Filing deadline for voluntary country-by-country reporting
- List of qualifying debt instruments (as at 31 December 2018)
- Stamp duty statistics (January)
- Taxpayer convicted (for omitting rental income and incorrectly claiming deductions)
Legislation and other initiatives
Anti-money laundering notices
For the current lists of terrorists, terrorist associates and relevant persons/entities under United Nations (UN) sanctions, members should refer to the Institute’s AML webpage which is updated regularly. The UN sanctions webpage of the Commerce and Economic Development Bureau contains consolidated lists of UN sanctions currently in force in Hong Kong.
AML/CFT guidance
For mandatory guidance and information on the AML/CFT requirements for members, see the Institute’s Guidelines on Anti-Money Laundering and Counter-Terrorist Financing for Professional Accountants.
Members who are licensed trust or company service providers should also see the Guideline on Compliance of Anti-Money Laundering and Counter-Terrorist Financing Requirements for Trust or Company Service Providers, by Companies Registry.
Members should be aware of the Hong Kong Money Laundering and Terrorist Financing Risk Assessment Report (in particular Chapter 6, covering designated non-financial businesses and professions), which indicates ML/TF risks and vulnerabilities in the Hong Kong market.
