Home' A Plus Magazine : March 2014 Contents NEWS
New initiatives on corporate
governance disclosure issued
The Institute is launching new initiatives to help
companies enhance corporate governance
disclosure and practices. A Guide on Better
Corporate Governance Disclosure comprises
four topics: the board’s roles, internal control,
the audit committee and communication with
Lau Yuk Chu Peter, CPA (practising)
Complaints: Failure or neglect to observe,
maintain or otherwise apply Hong Kong Stan-
dard on Auditing 250 Consideration of Laws and
Regulations in an Audit of Financial Statements
and Hong Kong Standard on Auditing 500 Audit
Lau is the sole proprietor of Peter Y.C . Lau
& Co. The Institute received information that,
in auditing the financial statements of a private
company, Lau did not obtain sufficient audit
evidence that dividends and rental expense
recorded as paid were actually paid. The Institute
also found that Lau had not obtained sufficient
audit evidence that the company met the criteria
for adopting section 141D of the Companies
Ordinance and the Small- and Medium-
sized Entity Financial Reporting Standard
for preparing the financial statements. After
considering information available, the Institute
lodged a complaint against Lau under section
34(1)(a)(vi) of the Professional Accountants
Ordinance. Lau admitted the complaints.
Decision and reasons: Lau was reprimanded
and ordered to pay the costs of the disciplinary
proceedings of HK$25,887. When making
its decision, the Disciplinary Committee took
into consideration the gravity of the breaches
including the fact that no one had suffered
economic loss, Lau’s admission and his previous
clear disciplinar y records.
Details of disciplinary findings are available at the
Institute’s website: www.hkicpa.org.hk.
The Institute notes with regret the passing of Ho
Kam-wa, Tommy Tam Hok-lam, Tang Shung-hei
and Tsang Shu-nan.
Budget policies “fall short
on competitiveness focus”
The second budget laid out by the administration of Chief Executive Leung
Chun-ying needs to add more vision and substance to its stated theme of
competitiveness, according to the Institute.
“ The most disappointing point for us is that there was no attention paid to the
idea of establishing a tax policy unit,” said Curtis Ng, Convenor of the Institute
Budget Proposal Subcommittee. A tax policy unit, he added, would help to look at
international developments and Hong Kong’s overall tax competitiveness.
“ The financial secretary raised the spectre of a future structural deficit in his
speech, based on the findings of the working group on long-term fiscal planning.
If that is the case, then it lends further support to the proposal for a tax policy unit
to be set up.”
Tax measures come across as too piecemeal and ad hoc, Ng added. “Hong Kong
needs a sound, secure and world-class tax system to ser ve the city’s long-term
interests and to uphold its status as a global hub of finance and commerce,” he said.
The Institute supports the budget measures related to interest expense
reductions for treasury operations, the stamp duty waiver on exchange-traded
funds and additional allowances for dependent parent and grandparents.
Such policies are in line with Institute proposals and target specific needs,
according to Florence Chan, Chair of the Institute’s Taxation Faculty Executive
Some policies, such as proposed measures aimed at low-income households,
are “welcome but nothing new or innovative,” said Chan.
4 March 2014
Hong Kong needs tax policy unit, says Institute panel
Institute issues guidance related
to new Companies Ordinance
The Institute has issued guidance related to the new Companies Ordinance,
which came into effect on 3 March.
AATB 4 Guidance on Section 408 of the Companies Ordinance relates to one of the
measures introduced: a new offence imposed by section 408 (formerly clause 399
of the Companies Bill) in relation to certain omissions in an auditor ’s report.
The offence would be committed if an auditor knowingly or recklessly caused
certain statements required by section 407(2)(b) and (3) to be omitted from the
The objectives of the guidance contained in AATB 4 are to:
• Set out the relevant sections in the Companies Ordinance to which penalty
• Consider the implications of those sections; and
• Provide guidance on the auditor’s reporting for statutory purposes.
The new ordinance also expanded the eligibility criteria for simplified
reporting. As such , the Institute has issued the Small- and Medium-sized Entity
Financial Reporting Framework and Financial Reporting Standard (Revised).
Please refer to paragraphs 22-43 of the revised standard for details.
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