Issue no. 70
(04 August 2005)
    Dear Members/Member Practices,
In this issue
IFAC Initiatives
AE/AS Changes
Insolvency Programme
TIG Forum
Practice Review Becomes Risk-based
Practice Review Report
Handbook Update
TechWatch
CPD Update
IFAC Implements New Initiatives
A
t its meeting last week in New York, IFAC agreed to initiate a global study on enhancing financial reporting, develop
guidance materials for SME audit engagements, and support developing nations to converge with international standards. The meeting also approved a guidance document on environmental management accounting. Click here to see the release.
Attending the meeting on behalf of the Institute were president Edward K.F. Chow and its IFAC board member Dr. Eric Li.

Update on AE/AS Requirements
T
he Institute has different levels of recognition arrangements with various accounting bodies. For some bodies, the Institute recognises both the

qualifying examination and the practical experience for membership admission, while for others the Institute only recognises the examination in full or in part.

The requirements for Authorised Supervisors and Counsellors of Authorised Employers have changed with effect from 1 July 2005 such that only persons with three years' membership with the Institute or one of the eight chartered accountancy bodies with which the Institute has a reciprocal membership agreement are eligible. This is because the Institute recognises not only the professional examination of these eight bodies, but also the practical experience, acquired under a training contract, of their members. These bodies are:

Canadian Institute of Chartered Accountants
Institute of Chartered Accountants in Australia
Institute of Chartered Accountants in England and Wales
Institute of Chartered Accountants in Ireland
Institute of Chartered Accountants of New Zealand
Institute of Chartered Accountants of Scotland
Institute of Chartered Accountants of Zimbabwe
South African Institute of Chartered Accountants
Under the new mutual recognition agreement between the Institute and CPA Australia that took effect on 1 July 2005, the Institute recognises the CPA Australia professional examination and is discussing the feasibility of enhancing the practical experience programme of CPA Australia with a view to recognition. Until this recognition is in place, CPA Australia members are not eligible for registration as Authorised Supervisors and Counsellors of Authorised Employers.
Click here for more information and the AE/AS application forms.

Good News for Insolvency Programme Candidates
T
he Institute's Diploma in Insolvency Programme has been recognised under the Continuing Education Fund. On completion of the programme, qualified
candidates can claim back $10,000 in course fees from the fund.
The deadline for late application to the programme is now extended to 9 August, with confirmation of acceptance deferred to 24 August. Click here to apply now.

TIG to Hold "Double Taxation Arrangement" Forum
E
arly support for the Taxation Interest Group (TIG) has been very good, with a membership
reaching 370 in just two months. It will hold its first technical event, a discussion forum on the Mainland - Hong Kong Double Taxation Arrangement, on 16 August. This is timely as next month the government will start talking to Mainland authorities on expanding the Arrangement. Click here to apply.
We note that recently there has been some confusion about the rationale for forming the TIG, including that it was a government or joint initiative,
Taxation Committee chair Paul Chan officiated the TIG Launch this June.
 
 
or that it was formed to look into reform of the Inland Revenue Ordinance. This is not the case. In fact, the idea for forming a TIG was first discussed by the Institute's Taxation Committee over a year ago. The response so far clearly shows there is significant demand amongst members for a tax forum. If you, too, are interested in joining the TIG and learning more about the tax issues affecting business here and on the Mainland, please click here.

Practice Review Becomes Risk-based
T
he Institute has issued a Communication Paper providing details on the progress of the revision to
the Practice Review Programme, which will adopt a risk-based approach.
The Communication Paper also seeks comments, by 30 September, on the draft practice review self-assessment questionnaire.

CPA Practices Reviewed Last Year
T
he Institute's Operations Report of the Practice Review Committee sets out the findings of its review in 2004 of 53
CPA practices involving 272 audit files. The major findings are in relation to inadequate audit documentation.
The Institute is one of the first accountancy institutes in the world to introduce a mandatory practice review system. First introduced in 1992, the Practice Review Programme reviews whether CPA practices observe, maintain or apply professional standards in their audit and assurance work.

Handbook Update No. 16
T
he Handbook Update No. 16 encloses amendments to HKAS 39, "Financial Instruments: Recognition and
Measurement," HKFRS 1, "First-time Adoption of Hong Kong Financial Reporting Standards" and HKFRS 6, "Exploration for and Evaluation of Mineral Resources." It also includes a new PN 720 on "Acting as Scrutineer at a General Meeting of a Listed Issuer."

TechWatch Issue 35
I
n addition to the projects on practice review and handbook update, the latest TechWatch features three
"Invitations to Comment" on international exposure drafts on financial reporting, auditing and ethics.

CPD Update
C
heck out the following programmes on HKFRS / IFRS training, which are still open for enrolment:
Also on sale is the self-learning kit for the HKICPA / ICAEW IFRS certification programme. The Institute's CPD programmes for August to November comprise a variety of topics and e-learning programmes. Register now to secure a seat.

If you require any technical assistance on this transmission, please do not hesitate to contact any of the following staff:

  Telephone no. E-mail address
Mr. Andrew Wong 2287 7245 andrew@hkicpa.org.hk
Mr. Anson Lok 2287 7041 anson@hkicpa.org.hk
Ms. Vian Tai 2287 7224 vian@hkicpa.org.hk
Mr. Kelvin Chiu 2287 7096 kelvin@hkicpa.org.hk


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