Dear Members and Students,
In the past few months since my last update to you, I have been busy with a great deal of actions on the international, China and local fronts on matters affecting the accounting profession. As there is much to share, I have split this update into several parts.
New Government: Meeting with Mr. C.Y. Leung, CE-elect of HKSAR
| 1. | Next CEPA negotiation |
On 3 April, I, together with vice president Susanna Chiu, attended a meeting with Mr. C.Y. Leung, the CE-elect, at his invitation made to the 10 professional bodies of the Coalition of Professional Services.
At the meeting, each profession gave an account of the issues encountered in the course of negotiating and implementing CEPA and the aspiration each holds regarding access to the mainland market under China's 12th 5-year plan. I presented the perspectives of the accounting profession.
At Mr. Leung's invitation, I submitted a full written proposal to him on our wish list for CEPA and further opening up the mainland market to Hong Kong certified public accountants.
A copy of this submission (in chinese) is attached for your reference.
To summarise, I urged that more needed to be done to unlock the doors for Hong Kong CPAs to practise in the mainland. I also laid out our concerns regarding the mainland localization policy and end of the Big Four joint ventures, the exceedingly low passing rate for Hong Kong CPAs taking the CICPA qualification exams despite having four out of seven paper exemptions under CEPA, and for Hong Kong citizens who already have practising rights in China having passed the exams, their inability to register as partner of a local firm in the mainland. Against these obstacles, I made two proposals which are "exam based" and two other proposals which are "non-exam based (免試執業)".
| Exam based proposals | |
| (1) | Introduce regulation as soon as possible to enable Hong Kong CPAs, who have already passed the CICPA qualification exam and are CICPA members, to register as partner of a mainland practice, or set up a mainland practice if they are CICPA practising members already. |
| (2) | Develop a joint qualification programme in both languages. |
| Non-exam based (免試執業) proposals | |
| (1) | Allow Hong Kong CPA practices to join with mainland CPA practices to form a (a) profit sharing entity (合作所) or (b) cost-sharing entity (聯營所) to practice professional services other than audit; and |
| (2) | Allow mainland CPA practice to admit Hong Kong CPA as non-resident partner (非常駐合伙人) for its practice to carry on non-audit services. |
Please refer to the attached submission (in chinese) for full details of these proposals.
Members' input is welcome and will be incorporated in future written and oral dialogues with the government. This I expect to be wider and deeper and more frequent in future, given the clear interest and concern the CE-elect has shown in the professional sector.
| 2. | C.Y. Leung's government-to-government (G to G) support to professional sector |
The CE-elect said he would enhance government support for the professional sector and seek partnership with professional bodies in these plans:
| (1) | A major government policy to be formulated on professional services. |
| (2) | A patron to be appointed within the government with designated responsibility for the professional sector including the conduct of government-to-government negotiations for and liaison with professional bodies. |
| (3) | The role of the Hong Kong government's economic and trade offices in the mainland will be enhanced to provide centralized support to professional bodies in resolving issues and conflicts arising from different rules and practices across cities and provinces and amongst different bureaus. |
To support these initiatives, the CE-elect also asked that all professional bodies provide him with (1) a 12-month work plan and also a manpower plan so that this could be tied in with university grants and places and demand from the mainland market; and (2) a designated full time person to work with the government on the various plans.
All in all, this is very positive news for the profession.
In Part 2, I will continue on the subject of "Practice Concerns".
Please contact me at CE@hkicpa.org.hk should you have any questions on the matters included in this Part 1 of my update. I value the opinion of members and look forward to hearing from you.
Sincere regards,
Winnie C.W. CheungChief Executive
Hong Kong Institute of CPAs
CPA: The Success Ingredient