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Update No. 307 includes revisions to the following pronouncements to align with the latest regulatory and professional requirements, and to provide additional guidance where necessary.

HKSIR 200, Accountants’ Reports on Historical Financial Information in Investment Circulars
HKSIR 500, Reporting on Profit Forecasts, Statements of Sufficiency of Working Capital and Statements of Indebtedness
PN 730 (Revised), Guidance for Auditors Regarding Preliminary Announcements of Annual Results
PN 740 (Revised), Auditor’s Letter on Continuing Connected Transactions under the Hong Kong Listing Rules

Institute submission

The Institute has submitted its comment letter on the International Accounting Standards Board (IASB) Exposure Draft Financial Instruments with Characteristics of Equity – Proposed amendments to International Accounting Standard (IAS) 32 Financial Instruments: Presentation, International Financial Reporting Standard 7 Financial Instruments: Disclosures and IAS 1 Presentation of Financial Instruments.

IASB March 2024 podcast & update

The IASB podcast, with its chair, vice-chair and executive technical director highlighting the projects discussed during its March meeting, and a summary of the March meeting, are now available.

Invitation to comment

The Institute is seeking comments on the International Auditing and Assurance Standards Board (IAASB) Exposure Draft on Proposed International Standard on Auditing 240 (Revised), The Auditor’s Responsibilities Relating to Fraud in an Audit of Financial Statements and Proposed Conforming and Consequential Amendments to Other ISAs (ED-240) by 5 May. These proposed revisions significantly strengthen the IAASB’s standard on auditors’ responsibilities related to fraud by defining the expectations in relation to fraud, delineating more robust procedures, and increasing transparency about the auditors’ responsibilities and fraud-related procedures in the auditor’s report.

The Institute is interested in hearing your views about ED-240. You are invited to take part in the online survey which highlights the key attributes of the proposals followed by yes/no questions. The survey will close on 5 May. Click here to participate now.

Revisions to local pronouncements

The following local pronouncements have been updated to align with the latest regulatory and professional requirements, and to provide additional guidance where necessary.

HKICPA Alert

The Institute has published Alert 50 that provides guidance on regulatory reporting by auditors under the Insurance Ordinance (Cap. 41) upon implementation of HKFRS 17 during the transitional period before the implementation of the risk-based capital regime.

Live webinar: Briefing on New Capital Investment Entrant Scheme

The New Capital Investment Entrant Scheme (New CIES) which aims to attract asset owners to settle in Hong Kong and explore its diverse investment opportunities through wealth allocation and management was launched on 1 March. Representative of the New CIES office will conduct a briefing session on 10 April to introduce the New CIES and answer questions from members.

The Institute’s Auditing and Assurance Standards Committee meetings

Minutes of the 413th and 414th meetings are now available.

HKICPA Proposed Revisions to the Definitions of Listed Entity and Public Interest Entity in the Code

We welcome your feedback on the Institute’s Proposed Revisions to the Definitions of Listed Entity and Public Interest Entity in the Code. The proposal incorporates changes resulting from the final pronouncement issued by the International Ethics Standards Board for Accountants (IESBA) in April 2022, with local refinements to define a public interest entity (PIE) more explicitly to align with the circumstances in Hong Kong.

Notably, the proposal incorporates the following additional PIE categories in the Institute’s Code of Ethics for Professional Accountants, taking into account the specific context of Hong Kong:

MPF schemes registered under the MPF Ordinance.
ORSO schemes registered under the ORSO Ordinance with total assets exceeding HK$100 million by reference to the most recent set of audited financial statements.

Watch the video to understand the proposed revisions and submit your insights by 27 April.

Invitation to comment

The Institute is seeking comments on the following Exposure Drafts issued by the IESBA on:

Using the Work of an External Expert by 30 March which proposes an ethical framework to guide professional accountants or sustainability assurance practitioners, as applicable, in evaluating whether an external expert has the necessary competence, capabilities and objectivity in order to use that expert’s work for the intended purposes. The proposals also include provisions to aid in applying the Code’s conceptual framework when using the work of an external expert. Watch the IESBA’s webinar to understand more about the exposure draft.

International Ethics Standards for Sustainability Assurance (including International Independence Standards) (IESSA) and Other Revisions to the Code Relating to Sustainability Assurance and Reporting by 10 April. The Exposure Draft proposes a clear framework of expected behaviors and ethics provisions for use by all sustainability assurance practitioners regardless of their professional backgrounds, as well as professional accountants involved in sustainability reporting. Members may be interested in the following resources provided by the IESBA for the proposals:

HKICPA resource centre

Access resources and publications at the Institute’s Resource Centre to the Code which will keep you updated on the latest ethics pronouncements.

The Institute welcomes the Government’s vision statement on developing sustainability disclosure ecosystem in Hong Kong

The Institute welcomes the Government's Vision Statement on Turning Obligations into Opportunities in Developing the Sustainability Disclosure Ecosystem in Hong Kong, that outlines the development of a comprehensive ecosystem for sustainability disclosure in Hong Kong. The Institute remains committed to playing a significant role within the Government’s vision as the sustainability reporting standard setter in Hong Kong, and looks forward to participate as part of the Government’s capacity building efforts to prepare local stakeholders for sustainability reporting. Read the Institute's press release for details.

Meeting with ISSB

The Institute's leadership hosted Mr. Jingdong Hua, Vice-Chair of the International Sustainability Standards Board (ISSB), Mr. Zhengwei Zhang, Beijing Office Director and Special Adviser to Chair of the ISSB, and Ms. Jialing Si, Regulatory Affairs Manager for Asia for the ISSB, to discuss the latest developments in Hong Kong as well as the Institute’s work on sustainability disclosure standard setting and capacity building.

SFC consults on proposals to enhance REIT regime and SFO market conduct regime for listed CIS

On 28 March, the Securities and Futures Commission (SFC) launched a consultation on a statutory scheme of arrangement and compulsory acquisition mechanism for real estate investment trusts (REITs) and an enhanced market conduct regime for listed collective investment schemes (CIS) under the Securities and Futures Ordinance. Accordingly, Hong Kong REITs may conduct privatization and corporate restructuring in a way similar to other listed companies. Further, various market conduct regimes would be extended to listed CIS to enhance market integrity and investor protection.

The deadline for responding to the consultation paper is 27 May. Please refer to the press release for details.

Revision of Panel A Rules

The Official Receiver’s Office has reviewed the Panel A Rules in consultation with the Institute, primarily to address how liquidators can apply the new standard fee rates announced in February 2024. The revised Panel A Rules took effect on 1 April.

Institute issues submission on consultation on the implementation of global minimum tax and Hong Kong minimum top-up tax

The Institute issued a submission on 20 March, in response to the Financial Services and the Treasury Bureau (Treasury Branch)’s consultation on implementation issues, including the tax compliance and administration framework, relating to the introduction in Hong Kong of a global minimum tax and a Hong Kong minimum top-up tax. These changes are being driven by international tax developments, specifically, the Global Anti-Base Erosion Rules, issued by Organization for Economic Co-operation and Development. The Institute’s submission provides views as to how the proposed measures should be implemented in practice, including how they should co-exist with the existing tax regime in Hong Kong, and also comments on other issues that the Government should consider in drawing up more detailed legislative proposals.

Electronic filing of employer’s return - easy, secure and environment-friendly

Employer’s Return of Remuneration and Pensions (Form BIR56A) for the year ended 31 March 2024 were issued on 2 April. Employers are required to complete and file the return to the Inland Revenue Department (IRD) within one month together with the Form IR56B for reporting of remuneration paid to the employees.

Employers can file the employer’s returns online by using "iAM Smart+" or eTAX account. The IR56 Forms Preparation Tool can be used to prepare the data file of annual Form IR56B for uploading to the IRD via the Online Mode or the Mixed Mode. Employers adopting Mixed Mode submission, after uploading of data file(s), are only required to submit the duly signed paper form BIR56A and the cover page (i.e. the first page) of the Control List generated from the system to complete the submission process. In addition, to tie in with employers in preparing early for the submission, the IR56 Forms Preparation Tool can be used to prepare the data file of annual IR56B starting from 1 March each year.

Please visit the IRD website for details.

Announcements by the 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:

The United Nations Sanctions (Libya) Regulation 2019 (Amendment) Regulation 2024 was gazetted on 28 March.
The United Nations Sanctions (Yemen) Regulation 2019 (Amendment) Regulation 2024 was gazetted on 28 March.
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.

Other AML news:

Appointments to Anti-Money Laundering and Counter-Terrorist Financing Review Tribunal

USEFUL RESOURCES

Publications from other organizations:

5 leadership misconceptions that hinder success from Entrepreneur.com
4 ways to build businesses’ long-term sustainability from Financial Management
Risk concerns remain for CFOs, but they see improvement ahead from Journal of Accountancy
Cybersecurity action plan: 7 tips for small business CFOs from CFO.com

Disclaimer: Some sections contain information from outside sources. We endeavour to link to reputable sources but the Institute is not responsible for the accuracy of the content and the content does not necessarily represent the views of the Institute.

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