Your fortnightly technical updates newsletter (1 September 2021)

Standard setting

IASB investor perspective article

Issue 24 of the International Accounting Standards Board (IASB) Investor Update highlights an interview with Philip Robinson, accounting specialist in the Corporate Finance Group at Moody's Investors Service and member of the Capital Markets Advisory Committee. It also includes a reminder for papers that are open for consultation from the IASB.

Institute webinar HKFRS 17 Insurance Contracts: An update in a nutshell

The webinar on 29 October will provide a high-level understanding of the basic requirements of HKFRS 17. It will serve as a refresher course and cover some of the key aspects of the new standard. This webinar will also cover amendments to the standard that have changed some of the requirements, and which were approved by the Institute in late 2020 following the publication of Amendments to IFRS 17 Insurance Contracts in June 2020.

New webpage: Presentation and disclosures of financial statements

The Institute has developed a new webpage which contains pronouncements, guides and articles that are relevant to the presentation and disclosures of financial statements for the following projects:

Primary financial statements;
HKFRS Practice Statement 2 Making Materiality Judgements;
Disclosure of accounting policies; and
Classification of liabilities as current or non-current.

Invitation to comment

The Institute is seeking comments on the International Auditing and Assurance Standards Board (IAASB) Exposure Draft Proposed International Standard on Auditing for Audits of Financial Statements of Less Complex Entities (ISA for LCE) by 31 December. The proposed standard aims at focusing the work of auditors through requirements designed to be proportionate to the typical nature and circumstance of less complex entities. To facilitate responses, the IAASB has prepared an optional response template.

Learn more about the proposed standard by reading the overview article from the International Federation of Accountants (IFAC) and the IAASB webpage.

Workshop for new auditors (re-run)

The workshop on 23, 27 Sep and 4 Oct is a tailor-made programme that provides the core concepts and practical skills essential for new auditors of financial statement audits. It applies an interactive learning format through discussions, case studies and role-play. Speakers will teach auditing concepts and practical skills, as well as share their practice experience relevant to new auditors.

How long should firms keep their engagement documentation?

As required by HKSQM 1, Quality Management for Firms that Perform Audits or Reviews of Financial Statements, or Other Assurance or Related Services Engagements, firms should design and implement systems of quality management by 15 December 2022, including to maintain and retain engagement documentation appropriately. The Institute published this guidance which sets out factors for firms to consider when determining an appropriate retention period for engagement documentation.

Invitation to comment

The Institute is seeking comments on the International Ethics Standards Board for Accountants Exposure Draft Proposed Quality Management-related Conforming Amendments to the Code by 5 September.

New series of articles on ethical leadership

To help guide finance professionals to maintain ethical standards in a complex environment, the Chartered Professional Accountants of Canada, the Institute of Chartered Accountants of Scotland, and the International Federation of Accountants have released a new publication series – Ethical Leadership in an Era of Complexity and Digital Change, focusing on ethical leadership that is crucial to the future success of the accountancy profession and the global financial system as a whole.

Paper 1 of the series – Complexity and the professional accountant: Practical guidance for ethical decision-making addresses the key themes presented in the exploratory work, leveraging the event discussions and recommendations, to offer practical guidance for finance professionals in the area of ethical leadership.

Webinar on plugging the net-zero information gap

The International Federation of Accountants and the Association of Chartered Certified Accountants are partnering to host a free webinar on 20 September as part of Climate Week NYC on the role of investors, accountants and capital markets. Speakers will discuss how climate information and reporting can be improved to meet business and investor needs. Register now.

Advocacy and practice development

SFC’s consultation conclusions on climate-related risks in funds

On 20 August, the Securities and Futures Commission (SFC) released consultation conclusions on the proposed climate-related risk management and disclosure requirements for fund managers, together with amendments to the Fund Manager Code of Conduct (FMCC) and a circular setting out the expected standards for complying with the amended FMCC, including:

baseline requirements for all those managing collective investment schemes (CIS); and
enhanced standards for fund managers with CIS under management which equal or exceed HK$8 billion in fund assets for any three months in the previous reporting year. This represents an increase from the HK$4 billion threshold proposed in the consultation paper.

Please refer to the press release for details. The first phase of the new requirements will be implemented on 20 August 2022.

Please also refer to the Institute’s submission, which supported the SFC’s proposals in principle, while commenting on the details of their implementation.

Announcements by the Inland Revenue Department

Members may wish to be aware of the following matters:

AML notices

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:

What boards should know about climate change and value creation from Financial Management
7 traits all great business leaders share from Entrepreneur
How to develop a growth mindset from CPA Insider
How to speed up your digital transformation from Harvard Business Review

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