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Institute news

December 2017



From left: Raphael Ding, Chief Executive; Johnson Kong, Vice President; Eric Tong, President; Patrick Law, Vice President; Mabel Chan, Immediate Past President.


Institute elects leadership team for 2018 

The Institute elected its new leadership for 2018, comprising of Eric Tong as President, and Patrick Law and Johnson Kong as Vice Presidents, at its 45th annual general meeting on 14 December.

Tong is Audit and Assurance Partner at Deloitte China’s Global Financial Services Industry Group. He has served on the Council for five years and was elected vice president in 2016 and 2017. Law, who also served as vice president in 2017, and Kong joined the Council in December 2013 and December 2014 respectively.

Since joining the Council, Tong has served on many committees, including as chair of the Auditing and Assurance Standards Committee and Securities Regulatory Advisory Panel. Together these committees oversee the standard-setting of the Institute and its responsibility for regulating and promoting efficient accounting practices in Hong Kong in order to safeguard its leadership as an international financial centre. He chaired the Digital Steering Group and the Branding and Communications Advisory Panel, which aims to enhance the delivery of services to members and re-energize the CPA brand. He has also been involved in Registration and Practising Committee, Education Standards Committee and Nomination Committee.

Law is Deputy Assurance Leader of EY Hong Kong and Macau, and Kong is Managing Director of Non-Assurance Services and International Liaison Partner of BDO.

At the election, seven members were elected to serve for a term of two years. Vice president Law was an elected and returning council member, while the newly elected members are Roy Leung; Fung Ling Yip; Lee Suk Yee; Leung Man Chun; Leung Man Kit and Li Kin Hang.

Existing elected members who will hold office for one more year until their two-year term ends are Vice President Kong; Raymond Cheng; Fong Wan Huen; Ronald Kung; Charbon Lo and Stella Cho. Immediate past president Mabel Chan will serve another year on the Council.

For lay members, the government appointed Vincent Chui, Head of Asia Institutional Equity Distribution and Private Wealth Management of Morgan Stanley and Wilfred Wong, Managing Director of Resolutions HR and Business Consultancy Company, for a term of two years commencing 1 December 2017. Two continuing government-appointed lay members Melissa Brown, Partner of Daobridge Capital, and Tam Wing-pong, a retired civil servant and former Postmaster General, will fulfil the second year of their terms.

Two more members co-opted by the Council will be announced later.

 

Best Corporate Governance Awards 2017

The Institute’s Best Corporate Governance Awards 2017 successfully concluded with a presentation ceremony held at a luncheon in the JW Marriott Hotel on 30 November. This year’s awards saw “a very interesting mix of first-time winners, regular awardees, some one-time past awardees and others which may have been repeat winners in the past but whose presence we have missed for a few years,” said then-president Mabel Chan, and Chair of the Judging Panel.

Guest of honour, Secretary for Financial Services and the Treasury James Lau, addressed the audience before presenting the awards. In his speech, Lau talked about the increasing attention being given to environmental, social and governance issues, and ethical and sustainable investment, in Hong Kong and internationally.

Only one diamond award was given out this year to CLP Holdings, in the Hang Seng Index (HSI) category, as the judges considered that, while there were companies with a high standard of governance in other categories, there was still a gap between those categories and the very best in the HSI. The Institute was pleased to see a number of first-time awardees this year, including Swire Properties and Hang Lung Properties.

Read more about how some of the winning companies and organizations are continuously pursuing good corporate governance here

 

Resolution by Agreement 

Wong Chi Wai, CPA (practising), Chung Mun Leung, CPA (practising), Wong Fei Cheung, CPA, and Centurion ZD CPA Limited (formerly known as AWC (CPA) Limited) (corporate practice)

Complaint: Failure or neglect to observe, maintain or otherwise apply sections 100.5(c) and 130.1 of the Code of Ethics for Professional Accountants because they failed to act diligently in accordance with applicable technical and professional standards when they provided professional services.

The Public Company Accounting Oversight Board (PCAOB) found that the respondents violated PCAOB rules and standards, as well as the Securities Exchange Act, in the performance of the financial statement audits of a United States-listed company, Kandi Technologies Group, Inc., for the years from 2010 to 2012. AWC was the auditor of the company and was registered with the PCAOB at all relevant times. Wong Chi Wai and Chung Mun Leung were respectively engagement director and engagement quality reviewer (EQR) of the audits. Wong Fei Cheung, acting as Director of Audit, reported to the engagement director and was significantly involved in the audits at the relevant times.

The PCAOB found that there were a number of audit deficiencies which included failures in identifying related party transactions, preparing sufficient and appropriate audit documentation, and identifying an independence violation in 2012. In addition, there was a breach of the relevant objectivity rules and standards by the EQR; and of PCAOB’s quality control standards by the engagement director which resulted in his failure to identify the EQR’s lack of objectivity in performing his role in the audits.

Decisions and reasons: In lieu of further proceedings, the Council concluded the following action should resolve the complaint:
1. The respondents acknowledge the facts of the case and their non-compliance with the relevant professional standards;
2. They be reprimanded;
3. Each of Centurion and Wong Chi Wai pay an administrative penalty of HK$25,000; and
4. The respondents jointly pay costs of HK$10,000. 

Information on the Institute’s complaint handling process and guidelines for the resolution are available at the Institute’s website under the “Compliance” section at: www.hkicpa.org.hk