Your fortnightly technical updates newsletter (11 January 2023)

Members' Handbook

Handbook Update No. 285 deals with the relocation of various issued pronouncements within Volume III of the Members’ Handbook from Section 2 (Pronouncements issued but not yet effective) to Section 1 (Pronouncements currently effective) as a result of:

HKSQM 1, Quality Management for Firms that Perform Audits or Reviews of Financial Statements, or Other Assurance or Related Services Engagements replacing HKSQC 1 as of 15 December 2022; and
HKSQM 2, Engagement Quality Reviews becomes effective for other assurance and related services engagements beginning on or after 15 December 2022.

The update also discards various pronouncements.

Standard setting

Invitation to comment

The Institute is seeking comments on the International Accounting Standards Board exposure draft International Tax Reform – Pillar Two Model Rules by 8 February 2023.

E-learning: Accounting cum auditing essence: a fresh look at impairment of trade and other receivables

The expected credit losses (ECL) model in HKFRS 9 Financial Instruments has been in application for several years. However, regulators continue to see application issues on estimating and evaluating ECL.

In this e-learning session, speakers go through the key accounting and auditing considerations in the impairment of trade and other receivable of non-financial corporates with reference to several interesting illustrative examples in an easy-to-follow and conversational manner.

E-learning: Amendments to HKAS 1 Presentation of Financial Statements

This archived webinar covers both recent and upcoming relevant amendments to Hong Kong Accounting Standard (HKAS) 1 which may affect the presentation of liabilities in the statement of financial position. The webinar also covers the recent amendments relating to the disclosure of accounting policies in financial statements, as well as common issues on presentation and disclosures of financial statements.

Invitation to comment

The Institute is seeking comments on International Auditing and Assurance Standards Board’s (IAASB) Exposure Draft on Proposed International Standard on Auditing (ISA) 500 (Revised), Audit Evidence and proposed conforming and consequential amendments to other ISAs by 24 March 2023. The proposed changes:

Provide a principles-based approach to considering and making judgments about information intended to be used as audit evidence and evaluating whether sufficient appropriate audit evidence has been obtained;
Modernize ISA 500 to be adaptable to the current business and audit environment, while considering scalability for different circumstances, including the entity and the auditor’s use of technology, such as automated tools and techniques; and
Emphasize the role of professional skepticism when making judgments about information intended to be used as audit evidence and evaluating the audit evidence obtained.

The Institute’s Auditing and Assurance Standards Committee meeting minutes

Minutes of the 405^th meeting is now available.

Audit focus for 2022 year-end audit

The Accounting and Financial Reporting Council’s Audit Focus reminds auditors on the key audit issues and areas they should take into consideration and pay particular attention to when performing 2022 audit work.

CPA Canada audit and assurance resources

CPA Canada has the following resources that may be of interest to members:

Auditing crypto-assets: Third-party service provider considerations discusses considerations when a third party provides crypto-assets services to the entity, including assessing whether a service organization relationship exists and identifying risks and relevant controls at the service organization.
A Frequently Asked Questions document for auditors addressing key questions that arise when an auditor is considering whether CAS 600, the revised standard for group audits adopted from ISA 600 (Revised), must be applied in a particular audit. CPA Canada has also issued an Alert on significant changes to the revised standard.

HKICPA resource centre

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

The Institute’s Ethics Committee meeting minutes

Minutes of the 254^th meeting is now available.

ISSB December 2022 podcast

The International Sustainability Standards Board (ISSB) podcast, with its chair and vice-chair highlighting the recent decisions and discussions during its 13-15 December 2022 meeting, is now available.

IFRS Foundation and MoF China sign an MoU to establish an ISSB office in Beijing

On 29 December 2022, the Trustees of the IFRS Foundation signed a Memorandum of Understanding (MoU) with the Ministry of Finance (MoF) of China to establish a Beijing office of the IFRS Foundation. The MoU is effective for an initial three-year period.

The Beijing office, established as a representative office, is expected to open in mid-2023. The office will work in collaboration and cooperation with other IFRS Foundation offices around the globe, with staff focused on leading and executing the ISSB’s strategy for emerging and developing economies, acting as a hub for stakeholder engagement in Asia, facilitating deeper co-operation and engagement with stakeholders, and undertaking capacity-building activities for emerging economies, developing countries and SMEs. The office will host meetings of the ISSB and its various advisory bodies and serve as a base initially for ISSB member Bing Leng. ISSB Vice-Chair Jingdong Hua, who is responsible for overseeing the ISSB’s engagement across all developing and emerging economies, will regularly visit the office.

Advocacy and practice development

Announcements by the Inland Revenue Department

Members may wish to be aware of the following matters:

Announcements by the government

Members may wish to be aware of the following matters:

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.

Useful resources

Publications from other organizations:

Risk and resilience priorities, as told by chief risk officers from McKinsey & Company
Training ahead for 2023: 5 ways to build trust and empathy at work from Training Magazine
Addressing ESG: Experts advise action but also patience from Journal of Accountancy
9 ways to protect your practice and clients from a cyber attack from In the Black

Install the HKICPA Events app

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