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Your fortnightly technical updates newsletter (8 November 2023)
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Members' Handbook
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Handbook Update No. 301 deals with the revision of the Statement 1.500 Continuing Professional Development, effective on 1 December 2023, as follows:
- To prescribe specific Continuing Professional Development ("CPD") requirements for Responsible Person of Public Interest Entity ("PIE") auditors.
- Members who are Responsible Persons of Registered PIE auditors are required to undertake annually at least 5 verifiable hours of CPD activities related to PIE engagements, as part of the existing total requirement for 60 verifiable hours in each rolling three-year period.
- The recognition of CPD compliance with other accountancy bodies have been updated and will not be applied to the CPD requirements relating to the Responsible Persons.
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Standard setting
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Institute submission
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The Institute has submitted its comment letter on the International Accounting Standards Board (IASB) Request for Information on Post-implementation Review of International Financial Reporting Standards (IFRS) 15 Revenue from Contracts with Customers.
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Reminder: Institute live webinars on financial reporting
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Join the following events in November to stay updated:
- 25 November: Annual Accounting Update 2023 “Keeping the Momentum in the Era of Corporate and Sustainability Reporting”
- 29 November: Impairment of non-financial assets
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IFRS Interpretations Committee agenda decisions
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The IFRS Interpretations Committee has published its agenda decisions on:
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IASB October 2023 podcast & update
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The IASB podcast, featuring its vice-chair and executive technical director, highlights the projects discussed during its October meeting and provides insights into recent engagements with stakeholders. Additionally, a summary of the October meeting is now available.
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Frequently asked questions – The application of materiality by the entity and the assurance practitioner
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The International Auditing and Assurance Standards Board (IAASB) has issued a set of frequently asked questions to provide additional information to stakeholders on materiality matters to help them better navigate the proposed ISSA 5000, including:
- How the concept of materiality applies to sustainability reporting and assurance;
- The definition of double materiality; and
- How an assurance practitioner considers an organization’s “materiality process” during a sustainability assurance engagement, among other questions and answers.
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Actions for auditing educators to prepare for the proposed new sustainability assurance standard, ISSA 5000
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This article by The International Federation of Accountants (IFAC) explores what the proposed new sustainability assurance standard could mean for the education of auditors and the actions required of those providing or involved in auditor education (including academia, professional accounting organizations, CPD providers, governments, regulators and employers) who rely on the International Education Standards as a basis for their curricula.
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New IFAC & CA ANZ Quality Management Toolkit
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This toolkit and the accompanying matrix intends to help small- and medium-sized practices (SMPs) establish their quality objectives, identify and assess quality risks, and design and implement responses to address their identified quality risks. In adapting the toolkit, SMPs should tailor its content to their nature, circumstances, and engagements in order to develop their unique quality management system.
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Latest developments in integrated reporting assurance – momentum is building
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Integrated reporting is increasingly being adopted around the world to communicate the story of a business to investors and other stakeholders. To build the credibility of integrated reports, integrated reporting assurance is also on the rise. This article highlights recent developments in integrated reporting and the assurance of integrated reports, including the experience of a selection of organizations and their assurance providers.
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Live webinar: Industry update relating to investment funds
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The live webinar on 28 November will cover:
- Regulatory regime for SFC Type 13 Regulated Activity;
- Practical issues in relation to certification of funds for carried interest tax concession;
- Latest development of the eMPF Platform and relevant regulatory updates; and
- Accounting treatment for long service payment as a result of the passing of the Employment and Retirement Schemes Legislation (Offsetting Arrangement) (Amendment) Bill 2022.
Click here to learn more and register now.
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The Institute’s Auditing and Assurance Standards Committee meeting
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Minutes of the 409th meeting are now available.
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HKICPA resource centre
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Access resources and publications at the Institute’s Resource Centre to the Code which will keep you updated on the latest ethics pronouncements.
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A4S Summit 2023
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Accounting for Sustainability (A4S), of which the Institute is a member of its Accounting Bodies Network, will host this year’s A4S Summit on 27 November virtually. The summit will feature sessions on sustainability reporting standards, along with discussions led by finance and accounting leaders on the trends shaping our world and the practical actions required for a sustainable future. Find out the agenda on the event’s webpage and enrol in the summit for free.
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ISSB October 2023 podcast & update
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The International Sustainability Standards Board (ISSB) podcast, featuring its chair and vice-chair, highlights the discussions held during its October meeting and provides updates on recent progress towards jurisdictional adoption of the ISSB Sustainability Disclosure Standards as well as capacity building and translations. Additionally, a summary of the October meeting is now available.
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Advocacy and practice development
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Institute issues submission on the Exchange’s consultation on GEM Listing Reforms
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The Institute issued a submission in response to the Consultation Paper issued by the Stock Exchange of Hong Kong Limited (Exchange), seeking market feedback on GEM listing reforms.
In principle, the Institute supports the Exchange’s proposals to reform the GEM. However, the submission also advised that it is important at the outset for the Exchange to articulate clearly the vision and ultimate objectives for the GEM going forward. These should cover questions such as:
- Whether the GEM is intended to be primarily a stepping stone to the MB for early stage companies looking for funding, which aim to list on the MB once they achieve a sufficient level of growth and maturity; or mainly a liquid and vibrant market aimed at local and overseas SMEs, to encourage active trading in good quality SMEs.
- What types of investors the reformed GEM will be aimed at – institutional investors, private equity, corporates, professional investors, retail investors?
- With reference to other junior markets in the Mainland and overseas, how can the GEM differentiate itself, either in its overall positioning, or, if it is competing head on for the same business, its attractiveness?
- What key performance indicators should be adopted to measure its success and over what period?
The submission also responds to other questions raised in the consultation paper. Please refer to the submission for details.
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Exchange’s Consultation Paper on Proposed Amendments to Listing Rules Relating to Treasury Shares
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On 27 October, the Exchange issued a consultation seeking market feedback on proposed rule amendments to introduce a new treasury share regime, which may give issuers greater flexibility in managing their capital structure through share buy-backs and resales of treasury shares, enhancing the market’s competitiveness and appeal to both issuers and investors.
The deadline for responding to the consultation paper is 27 December. Please refer to the press release for details.
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SFC consults further on proposed amendments for implementing an uncertificated securities market
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On 31 October, the Securities and Futures Commission (SFC) launched a further consultation on implementing an uncertificated securities market (USM) in Hong Kong, inviting views on proposed amendments to:
- the Code of Conduct for Share Registrars (to be renamed the Code of Conduct for Approved Securities Registrars);
- the Guidelines for Electronic Public Offerings (to be renamed Guidelines for Electronic Public Offers); and
- Stamp Duty Ordinance
Please refer to the press release for details.
The deadline for responding to the consultation paper is 15 December. Members are welcome to submit any views or comments on the proposals in the consultation paper to the Institute, quoting their membership number and contact details, to Advocacy & Practice Development on or before 22 November.
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Update on Consultation on Enhancement of Climate Disclosures Under ESG Framework
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In April 2023, the Exchange published a consultation paper seeking market feedback on proposals to enhance climate-related disclosures under its environmental, social and governance (ESG) framework, with a proposed implementation date of 1 January 2024. The proposals were informed by the IFRS S2 Climate-related Disclosures (ISSB Climate Standard) exposure draft published by the International Sustainability Standards Board (ISSB) and their subsequent deliberations. The Exchange stated that it would take into account the final ISSB Climate Standard when finalizing the Listing Rule amendments.
The Institute issued a submission in response to the Consultation Paper.
On 3 November 2023, the Exchange announced that the implementation date of the Listing Rule amendments will be postponed to 1 January 2025, to allow more time for issuers to familiarize themselves with the new climate-related disclosure requirements subject to certain circumstances.
Please refer to the press release for details.
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SFC supports and sponsors the development of an industry-led voluntary code of conduct for ESG ratings and data products providers
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On 31 October, the SFC announced that it supports and sponsors the development of a code of conduct for voluntary adoption by ESG ratings and data products providers providing products and services in Hong Kong. The Voluntary Code of Conduct (VCoC) will be developed via an industry-led working group, namely the Hong Kong ESG Ratings and Data Products Providers VCoC Working Group.
Please refer to the press release for details.
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Announcements by the Inland Revenue Department
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Members may wish to be aware of the following matters:
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Announcements by the government
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Members may wish to be aware of the following matters:
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Anti-money laundering (AML) notices and news
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AML notices:
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Useful resources
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Publications from other organizations:
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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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