NAVIGATION

MEMBERS' HANDBOOK

Handbook Update No. 317 deals with the revision of the Statement 1.500 Continuing Professional Development, as follows:

To provide the specific Continuing Professional Development (CPD) requirements for membership re-applicants.
To provide the specific CPD requirements for members whose membership has been suspended.
Other clerical edits.

Institute workshop series (Part 1) - Identifying material information and determining the value chain

As part of the Institute’s capacity building program, a series of workshops will be held to enrich the sustainability reporting knowledge of members and stakeholders in the local business community.

Don’t miss the workshop on 12 November, where speakers will discuss the concepts of materiality and proportionality mechanisms in IFRS Sustainability Disclosure Standards, and share insights on practical applications through illustrative examples.

Upcoming live webinars on financial reporting

Join the upcoming live webinars to stay updated on the latest developments in financial reporting standards and to be well prepared for the year-end closing of 2024.

30 November: Annual Accounting and Sustainability Update 2024 - Be Prepared for the Upcoming Game Changers
4 December: Year-end reminders for insurers ─ Preparing for the year after implementation of Hong Kong Financial Reporting Standard (HKFRS) 17 Insurance Contracts
9 December: Accounting updates on financial instruments
16 December: Year-end financial reporting reminders for 2024
19 December: Unlocking HKFRS 18 – An overview of new presentation and disclosure requirements

Institute virtual roundtable discussion: IASB Exposure Draft Equity Method of Accounting

The Institute will host a virtual roundtable on 19 November to obtain views from stakeholders on the International Accounting Standards Board (IASB) Exposure Draft (ED) Equity Method of Accounting ─ International Accounting Standard (IAS) 28 Investments in Associates and Joint Ventures (revised 202x). The ED proposes amendments to IAS 28 to respond to stakeholders’ questions on how to apply the equity method, and to introduce new disclosure requirements to enhance the information entities provide about their investments in associates and joint ventures.

Investing in associates and joint ventures is a common practice in Hong Kong and the impact of such investments can be significant to the financial statements of the entities involved, as well as for investors, analysts and other users of financial statements with the related information. Members and other interested parties are highly encouraged to join the roundtable to understand the effects of the ED and share their perspectives. Register by 14 November to reserve your place.

To learn more about the ED, watch the webcast series presented by IASB members and technical staff.

Webcast: Understand the IASB Exposure Draft Climate-related and Other Uncertainties in the Financial Statements

In this webcast, IASB technical staff Gustavo Olinda and Karen Robson discuss the IASB's proposals which aim to improve the reporting of climate-related and other uncertainties in financial statements. The webcast covers the project's background, key research findings and an overview of the illustrative examples that the IASB developed in response to strong demand from stakeholders, particularly investors.

IASB review concludes the revenue Standard is working as intended

The IASB has concluded its Post-implementation Review of International Financial Reporting Standard (IFRS) 15 Revenue from Contracts with Customers and published the Project Summary and Feedback Statement. Overall, feedback and research carried out during the review indicated that IFRS 15 is working as intended and provides investors with useful information. The IASB has also identified a few application issues to consider in its next agenda consultation, which it plans to start in late 2025. These issues include:

how companies decide whether they are the main seller or an agent in a transaction;
how to report on payments to customers; and
how IFRS 15 works alongside several other IFRS Accounting Standards.

Q3 2024 IFRS Interpretations Committee podcast

In this podcast, the IFRS Interpretations Committee’s Chair Bruce Mackenzie and Member Karsten Ganssauge discuss the decisions made at the September Committee meeting.

IFRS for SMEs Accounting Standard September Update

The IFRS for SMEs Accounting Standard September Update is now available.

Invitation to comment

The Institute is seeking comments on Proposed Hong Kong Standard on Auditing for Audits of Financial Statements of Less Complex Entities (HKSA for LCE). The proposal is to modify Part A of the International Standard on Auditing for Audits of Financial Statements of Less Complex Entities (ISA for LCE) issued by the International Auditing and Assurance Standards Board’s (IAASB) regarding the authority of the standard concerning the scope of the proposed HKSA for LCE in a local context, which includes:

Refining the classes of entities prohibited from using the proposed HKSA for LCE to entities having public interest characteristics within a Hong Kong context.
Establishing quantitative thresholds to determine the appropriate use of the proposed HKSA for LCE within a Hong Kong context.

Watch the video to understand the proposed standard. You may submit your views via email or participate in the survey by 17 November.

The IAASB has also issued the following:

ISA for LCE – Authority Supplemental Guidance: This resource helps users in determining the appropriate situations to use the ISA for LCE, which further explains relevant matters and circumstances in accordance with Part A of the standard.
ISA for LCE – Adoption Guide: This guide supports jurisdictions in adopting the ISA for LCE by providing valuable insights into the adoption process. It highlights common steps and successful approaches, and addresses potential challenges.

HKICPA Audit Practice Manual (APM) (2024 edition)

The APM 2024 edition has been updated to align with the requirements of HKSA 600 (Revised), Special Considerations—Audits of Group Financial Statements (Including the Work of Component Auditors). Click here to explore the new features.

Members may register for the e-learning recording that provides an overview of the HKSA 600 (Revised).This session covers key changes from current practices and their impact to group audit engagements. Access to the Institute’s resource centre for the pronouncements, guides and articles that are relevant to the standard.

Audit focus for 2024 year-end audits

The Accounting and Financial Reporting Council (AFRC) has released Audit Focus for 2024 Year-End Audits, providing guidance to auditors in effectively identifying and responding to the elevated risks in financial reporting and auditing created by the current uncertain economic conditions. Critical reminders to auditors are also provided in this publication to ensure that audit quality is upheld for the upcoming year-end audits.

Importance of sustainability assurance

The International Federation of Accountants (IFAC) has released a video titled “Why is Sustainability Assurance Important?”. This video explains why sustainability assurance is important to both new and veteran investors. It is part of the World Investor Week series which is intended to help investors grasp the fundamentals of accounting, allowing non-accountants to better understand how accounting and investment intersect.

For those interested in learning more about other accounting fundamentals, please see the IFAC’s work for World Investor Week 2023, 2022 and 2021. These informative videos aim to clarify the role of accountants and highlight the importance of their work to investors.

New technology position to shape the future of audit and assurance standards

The IAASB has introduced a new Technology Position that will guide how it adapts its work to embrace the intersection of audit, assurance, and technology. This new position marks a significant step forward in the IAASB’s ongoing commitment to enhancing the quality and relevance of its standards amid rapid technological advancement.

Navigating the future of audit in a digital age

As emerging technologies reshape the audit profession, it is crucial for audit practitioners to stay ahead of trends. The Audit and technology playbook: A practitioner’s guide, developed by Chartered Accountants Australia and New Zealand (CA ANZ) and the Association of Chartered Certified Accountants (ACCA), offers a comprehensive resource to help auditors adapt and thrive in this changing landscape.

E-learning: Solicitors’ accounts rules and PN 840 reporting engagements

Register for the e-learning that:

Explains the Solicitors’ Accounts Rules and highlights the common breaches of such obligations;
Provides an explanation of the recommended work procedures outlined in PN 840 (Revised), Reporting on Solicitors' Accounts under the Solicitors' Accounts Rules and the Accountant's Report Rules; and
Shares prevalent challenges and breaches commonly encountered while undertaking engagements to issue an accountant’s report.

Institute webinar series: Towards an effective and efficient audit

Join the following webinars to refresh and enhance your auditing knowledge. Experienced speakers will highlight key requirements through illustrative examples and discuss common pitfalls identified in recent AFRC inspections.

23 October: Auditing sampling and journal entry testing
29 October: External confirmations and audit documentation
20 November: Auditing opening balances and related parties

Virtual Conference: Annual Auditing Update 2024: Navigating the Evolving Landscape Together

Enrol in the conference on 26 October, which will cover topics including:

Updates on the IAASB projects on fraud and PIE Track 2 project
Overview of the proposed HKSA for LCE
Key changes and requirements of HKSA 600 (Revised)
Updates on local ethics and International Ethics Standards Board for Accountants’ (IESBA) projects, including the definitions of listed entity and public interest entity and ethics survey observations

Industry specific events in November

Register now to gain updates and implementation tips in the following areas:

Industry Update Relating to Investment Funds (11 November): This session will feature insights by speakers from the Securities and Futures Commission, the Mandatory Provident Fund Schemes Authority and a Big Four firm. They will provide an overview of the newly developed investment products of digital assets and tokenization of investment funds, discuss the latest developments of the eMPF, and explore how funds, wealth and asset managers are leveraging GenAI.

Workshop on Audit of Licensed Corporations and Associated Entities of Intermediaries (14 November): This session will cover:

Overview of the Securities and Futures Ordinance requirements
Highlights and reminders on PN 820 (Revised), The Audit of Licensed Corporations and Associated Entities of Intermediaries
Latest Securities and Futures (Financial Resources) Rules for the preparation of financial returns
Sharing of latest developments in rules and regulations relevant to audit

The Institute’s Auditing and Assurance Standards Committee meeting

Minutes of the 419^th meeting are now available.

Questions & Answers: HKICPA Revisions to the Definitions of Listed Entity and Public Interest Entity in the Code

This set of Questions and Answers complements the Basis for Conclusions for the Revisions to the Definitions of Listed Entity and Public Interest Entity in the Code issued by the Institute in July 2024. It aims to assist practitioners to better understand the revised requirements and guidance. Watch the video highlighting the key revisions.

Ethics Circular 1 Guidance for Small and Medium Practitioners on the Code

The Institute has updated the Ethics Circular 1 to incorporate the following revised provisions of the Code of Ethics for Professional Accountants (Code):

Revisions to the Code Relating to the Definition of Engagement Team and Group Audits
Technology-related Revisions to the Code

Access to the Institute’s resource centre for the pronouncements, guides and articles that are relevant to the revised provisions.

Safeguarding auditor independence: Concerns surrounding procurement and purchases from audit clients

This article by AFRC highlights concerns regarding potential threats to auditor independence arising from procurement and purchases involving audit clients. It calls on audit firms to remain vigilant in managing their relationships with these clients and to implement robust procedures for identifying and mitigating any potential independence threats. The article also points out that the need for audit committees to take a more proactive role in safeguarding their auditors’ independence.

Institute's ethics webinars

Technology-related Revisions to the Code (13 November) will explore the revisions and how they strengthen the Code in guiding professional accountants in an era of rapidly evolving technology. The speaker will discuss how to effectively apply these revisions to navigate ethical challenges and manage risks in the digital age, especially concerning the fundamental principles of confidentiality, professional competence and due care, as well as handling complex situations.
Tax Planning Revisions to the Code and Implications in Tax Practice (5 November) will cover an overview of the key changes to the Code of Ethics for Professional Accountants; and implications of the revisions in tax practice.

Institute e-learning: HKICPA Exposure Drafts HKFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information and HKFRS S2 Climate-related Disclosures

The Institute is seeking comments on the Exposure Draft HKFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information and Exposure Draft HKFRS S2 Climate-related Disclosures (HK EDs) by 27 October.

To enhance understanding of the HK EDs, the Institute held a live webinar on 4 October, which is now archived and available for enrollment until 27 October. Enrol now to learn more about:

• The Journey of the HK EDs: Learn about the history and development of these exposure drafts.

• Why Global Alignment Matters: Understand the reasons and benefits of full convergence with IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information and IFRS S2 Climate-related Disclosures.

• Understanding the HK EDs: Gain insights into the key elements, scope, and application of the HKFRS Sustainability Disclosure Standards.

• The Path Forward: Explore the next steps for sustainability reporting in Hong Kong.

Announcements by the Inland Revenue Department (IRD)

Members may wish to be aware of the following matters:

Announcements by the government

Members may wish to be aware of the following matters:

Anti-money laundering (AML) notices and news

AML notices:

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.

Publications from other organizations:

How CFOs can monetize AI for financial growth from CFO.com
The top 5 traits of successful entrepreneurs from Entrepreneur.com
The link between sustainability reporting and social performance from Financial Management
'Majority moves' in tech: Finance leaders reveal popular practices from Journal of Accountancy

Disclaimer: Some sections contain external links and information from outside sources. We endeavour to link to reputable sources but the Institute is not responsible for the accuracy or content of the external site, and the content does not necessarily represent the views of the Institute. We recommend using your discretion when visiting these links.

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