Your fortnightly technical updates newsletter (23 June 2021)

Standard setting

Invitation to comment

The Institute is seeking comments on the IFRS Interpretations Committee tentative agenda decisions to not add two standard-setting projects to the work plan by 23 July.

Institute workshops on HKFRS 17 Insurance Contracts

The Institute will hold a series of face-to-face full day workshops in August for professionals who have acquired an understanding of the basic principles of HKFRS 17 Insurance Contracts and now wish to develop a working knowledge of the standard:

26 August: Life insurance: Deep dive application – Contractual service margin (CSM) calculation, expense allocation, highlights of the June 2020 amendments, and practical insights
30 August: General insurance: Deep dive application – CSM calculation, expense allocation, and application examples
31 August: General insurance: Reinsurance, interaction with other standards, presentation and disclosures, highlights of the June 2020 amendments, and practical insights

IASB second webinar on BCUCC discussion paper

On 30 June, the International Accounting Standards Board (IASB) will hold a live webinar on the Discussion Paper DP/2020/2 Business Combinations under Common Control (BCUCC), discussing feedback the IASB received in the initial outreach activities and addressing some of the frequently asked questions from stakeholders. Members can also submit comments to the Institute by 5 July.

June IFRS Interpretations Committee update

TheJune IFRS Interpretations Committee Update newsletter, summarizing the decisions reached by the committee, is now available.

Invitation to comment

The Institute is seeking comments on the International Auditing and Assurance Standards Board (IAASB) Survey Consultation, the IAASB’s Work Plan for 2022-2023 by 5 July.

Webinar on the FRC’s inspection findings

At the webinar on 29 July the speaker will explore the Financial Reporting Council’s (FRC) inspection findings from its 2020 inspections, the FRC's expectations of auditors, preparers and audit committee members of public interest entities, and areas of focus for 2021 inspections.

New quality management implementation guide

The IAASB released two first time implementation guides to help stakeholders implement its suite of quality management standards:

International Standard on Quality Management (ISQM) 1, Quality Management for Firms that Perform Audits or Reviews of Financial Statements, or Other Assurance or Related Services Engagements
ISQM 2, Engagement Quality Reviews

The IAASB also plans to issue an implementation guide for International Standard on Auditing (ISA) 220 (Revised), Quality Management for an Audit of Financial Statements, in Q3 this year.

The standards will come into effect on 15 December 2022.

ICAEW audit and assurance resources

The Institute of Chartered Accountants in England and Wales (ICAEW) has the following material that may be of interest to members:

Webinar recording on ISA 315 (Revised) Identifying and Assessing the Risks of Material Misstatement explores different starting points of implementation; changes to methodology and practical implementation challenges
Webinar recording on ISA 540 (Revised) Auditing of Accounting Estimates and Related Disclosures discusses required changes for the audit of accounting estimates and practical implementation tips in the 2020/2021 reporting environment
Webinar recording on quality management in audit firms discusses the new requirements; how firms can be proactive and practical implementation issues
Audit and Beyond June 2021 on technical articles such as fraud and COVID-19 support; improving audit files and quality management

Institute members can also subscribe to ICAEW’s International Standards for free to access a wide range of resources on auditing and ethics.

IESBA webinars on revisions to the code of ethics

Watch the International Ethics Standards Board for Accountants’ (IESBA) webinar recordings on the revised non-assurance services provisions and revised fee-related provisions to the IESBA Code of Ethics for Professional Accountants that will come into effect in December 2022.

IESBA eNews

The 2nd quarter, 2021 edition of the IESBA eNews is now available. It includes highlights of the various activities going on in and around the IESBA.

Advocacy and practice development

Institute submission on HKEX consultation on review of Corporate Governance Code and related listing rules

The Stock Exchange of Hong Kong’s proposals covered a range of issues including establishing a corporate culture; directors’ independence and attendance at general meetings; board diversity; communications with shareholders; and linkages with environmental, social and governance (ESG) reporting, including the timing of publication of ESG reports. The Institute made a submission, which supports the general direction of the proposals and most of the specific measures put forward in the consultation paper. We also welcome the improvements in clarity. At the same time, the submission also expresses reservations about a few specific proposals.

In addition, the recommended best practice on board evaluations could be considered for upgrading to a provision in the Corporate Governance Code. Regular evaluations would help to underpin various other matters covered in the paper, and to reassure stakeholders that the board is committed to continuous improvement in its performance.

Announcements by the Inland Revenue Department

Members may wish to be aware of the following matters:

Fraudulent email purportedly issued by Inland Revenue Department
Inland Revenue Department waives surcharges for payment of tax by instalments for businesses and individuals in need
Hong Kong-Georgia tax treaty in force
Tax obligations of property owners
The Inland Revenue (Amendment) (Miscellaneous Provisions) Ordinance 2021 was gazetted on 11 June and took effect immediately. Amendments in relation to foreign tax deduction take effect from the year of assessment 2021/22.
Gazettal of Revenue (Stamp Duty) Ordinance 2021
Tax information on stamp duty - inadequate consideration has been updated
Stamp Duty statistics (May 2021)

Announcements by the government

Members may wish to be aware of the following matter:

AML notices

Gazetted list of terrorists and terrorist associates designated by the United Nations Security Council, published pursuant to the United Nations (Anti-Terrorism Measures) Ordinance (Cap. 575) was gazetted on 18 June. The List of individuals, groups, undertakings and entities published under section 25 of the United Nations Sanctions (ISIL and AI-Qaida) Regulation (Cap.537CB) was updated on 18 June. See the relevant UNSC press release.

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:

Rethinking business: Tactical lessons for the post-pandemic era from Financial Management
Build your reputation as a trustworthy leader from Harvard Business Review
Cryptocurrency: Accountants look beyond the horizon by ICAEW
Top soft skills for accounting professionals from Journal of Accountancy
7 ways to ignite employee engagement and boost your bottom line from Entrepreneur

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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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