Your fortnightly technical updates newsletter (17 March 2021)

Members' Handbook

Update No. 256 contains amendments to Statement 1.500 Continuing Professional Development (Revised March 2021) to include the requirements of International Education Standard 8, Professional Competence for Engagement Partners Responsible for Audits of Financial Statements (Revised).

Standard setting

Institute roundtable on the IASB’s BCUCC discussion paper

On 11 May, the Institute will hold a roundtable on the International Accounting Standards Board’s (IASB) Discussion Paper DP/2020/2 Business Combinations under Common Control (BCUCC), which explains the IASB’s preliminary views on how to reduce the diversity in practice and improve the transparency and comparability in reporting BCUCC. Representatives from the IASB will participate in the roundtable, and this will be an excellent opportunity to communicate directly with local and international standards setters. Members can also submit comments by 5 July.

COVID-19-related rent concessions beyond 30 June 2021

The IASB held a supplementary meeting on 10 March to consider feedback on Exposure Draft ED/2021/2 Covid-19-Related Rent Concessions beyond 30 June 2021, which proposes to extend the time period over which the practical expedient in paragraph 46A of IFRS 16 Leases is available for use. The IASB decided to finalize the proposal with an additional explanatory transition paragraph and plans to publish the final amendment to IFRS 16 on 31 March 2021 (see Supplementary IASB Update March 2021). The Institute plans to publish an equivalent amendment to HKFRS 16 in early April.

Speech by the IASB Chair

Hans Hoogervorst, Chair of the IASB, delivered a speech at a meeting of the International Forum of Accounting Standard Setters reflecting how IFRSs have evolved during his 10-year tenure and the importance of independent standard setting.

Invitation to comment

The Institute is seeking comments on the International Auditing and Assurance Standards Board (IAASB) Exposure Draft Conforming and Consequential Amendments to the IAASB’s Other Standards as a Result of the New and Revised Quality Management Standards by 23 April. The proposed revisions align the IAASB’s standards related to review, assurance and related services, as well as its framework, with the new Quality Management Standards through conforming amendments.

Getting started with the new Quality Management Standards

The International Federation of Accountants’ (IFAC) article provides an overview of the new IAASB Quality Management Standards effective from 15 December 2022.

Professional scepticism in a remote working environment

A blog and podcast by CPA Canada shares perspectives and practical examples on applying professional scepticism in a remote working environment during uncertain times.

COVID-19 year-end reminders for auditors

A CPA Canada’s blog summarizes the organization’s discussion with Canada’s audit regulators on issues that are causing audits to be more challenging this year given the effects of the COVID-19 pandemic.

Proposed revisions to the definitions of listed entity and PIE

The Institute is seeking comments on the International Ethics Standards Board for Accountants (IESBA) Exposure Draft Proposed Revisions to the Definitions of Listed Entity and Public Interest Entity in the Code by 3 April. The proposed revisions broaden the definition of a public interest entity (PIE) in the International Code of Ethics for Professional Accountants (Including International Independence Standards) to include more categories of entities.

The IESBA recently released a new staff publication providing additional context to the proposals, supplementing the guidance material in the explanatory memorandum of the exposure draft.

Members are invited to join the Institute’s roundtable on 7 April to share their views with Deputy Chair of the IESBA, members of HKICPA Ethics Committee and other participants. Members attending the roundtable will be entitled up to 1 CPD hour.

The IESBA will also hold global webinars on 25 and 29 March on key proposals in the exposure draft. During the webinars, the task force chair will discuss:

The overarching objective for additional independence requirements for audits of PIEs
Approach to revising the PIE definition and the introduction of a new term “publicly traded entity” to replace “listed entity”
Anticipated role of regulators, national standard setters and other relevant local bodies to refine the PIE definition as part of the adoption process
Increased role of firms

Latest edition of The IESBA eNews

The March 2021 edition of The IESBA eNews highlights various activities going on in and around the IESBA, such as the search for the board’s next chair, the upcoming virtual board meetings, and much more.

Feedback on IFRS Foundation’s consultation on sustainability reporting

The IFRS Foundation Trustees met in February and March to discuss feedback received on their Consultation Paper on Sustainability Reporting, which indicated an urgent need for the Foundation to play a role in developing global sustainability reporting standards. The Trustees are continuing their work on the establishment of an international sustainability reporting standards board within the existing governance structure of the IFRS Foundation, and plan to publish a feedback statement that summarizes the consultation feedback and how that feedback informed their decisions. The Trustees remain on track to make a final determination about a new board in advance of the United Nations COP26 conference in November.

Advocacy and practice development

Taxation Faculty yearbook 2020

Members of the Institute’s Taxation Faculty regularly contribute articles on taxation related topics to the Institute’s monthly magazine, A Plus. The articles from 2020 have been collected together in a new yearbook, entitled “Preparing for a complex future”.

The articles cover the wide range of areas our members are involved in, ranging from international taxation agreements, Hong Kong taxation developments, to Mainland China taxation. Members are welcome to contribute to A Plus on taxation related topics, please contact the Taxation Faculty for further information.

Announcements by the Inland Revenue Department

Members may wish to be aware of the following matters:

Final call: Subscription to China Taxation Yearbook 2020

The China Taxation Yearbook 2020, published under the auspices of China's State Taxation Administration, covers taxation work at the national and provincial levels as well as tax directions, policies, laws, statistics and articles. The yearbook is now available for subscription until 26 March.

Announcements by the government

Members may wish to be aware of the following matter:

Government tightens infection control measures for fitness centres

AML notices

Updated list of terrorists and terrorist associates under section 31 of the United Nations Sanctions (Sudan) Regulation 2013 (Cap. 537 sub. leg. BF) was gazetted on 9 March. See the relevant United Nations Security Council (UNSC) press release.

The List of individuals and entities published under section 30 of the United Nations Sanctions (Yemen) Regulation 2019 (Cap. 537CI) and List of individuals and entities published under section 31 of the United Nations Sanctions (Yemen) Regulation 2019 (Cap. 537CI) was updated on 4 March. See the UNSC Resolution 2564 (2021).

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:

Economic confidence recovers to near pre-pandemic levels for finance leaders from Financial Management
Strategic resilience during the COVID-19 crisis from McKinsey & Company
Are you ready for these ESG trends? by AICPA
The robots are coming for Phil in Accounting from The New York Times
Is your C-suite equipped to lead a digital transformation? from Harvard Business Review
How to nurture your accounting staff during the pandemic from Journal of Accountancy

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