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NAVIGATION

Guide published to help companies identify sustainability-related risks and opportunities and material information to provide

To support the implementation of International Sustainability Standards Board (ISSB) Standards around the world, the IFRS Foundation has published a new comprehensive guide. This guide is designed to help companies with the fundamental task of identifying and disclosing material information about sustainability-related risks and opportunities that could reasonably be expected to affect their cash flows, their access to finance or cost of capital over the short, medium or long term.

Invitation to comment

The Institute is seeking comments on the International Accounting Standards Board (IASB) Exposure Draft Provisions—Targeted Improvements (Proposed amendments to International Accounting Standards 37 Provisions, Contingent Liabilities and Contingent Assets) by 28 January 2025.

Institute live webinar: Common application issues of HKFRSs

Understanding the common application issues of Hong Kong Financial Reporting Standards (HKFRSs) is crucial for ensuring compliance and enhancing the quality of financial reporting. The Institute will hold a live webinar on 11 December to explore these common application issues, including:

Recent Agenda Decisions: Learn how the latest Agenda Decisions from the International Financial Reporting Standards (IFRS) Interpretations Committee impact financial reporting practices.

Regulatory Insights: Discover key observations identified by regulators, including the Accounting and Financial Reporting Council (AFRC), during inspections and reviews of financial statements.

Institute live webinar: Accounting updates for Small and Medium-sized entities

Join the live webinar on 21 January 2025 for accounting updates specifically relevant for small and medium-sized entities (SMEs). Topics to be discussed include:

Third edition of the IFRS for SMEs Accounting Standard ─ In 2022, the IASB published an exposure draft proposing amendments to IFRS for SMEs Accounting Standard to reflect improvements made in full IFRS Accounting Standards. The IASB expects to publish the third edition of the IFRS for SMEs Accounting Standard in the first quarter of 2025. In the webinar, the speakers will provide an overview of the key proposed changes, the IASB’s tentative decisions and potential issues in applying the proposed amendments. HKFRS for Private Entities, a financial reporting option for SMEs in Hong Kong, is the equivalent of IFRS for SMEs Accounting Standard.

HKFRS 19 Subsidiaries without Public Accountability: Disclosures ─ Issued in July 2024, HKFRS 19 is a voluntary standard that provides a reduced set of disclosure requirements in HKFRS Accounting Standards for eligible subsidiaries. In the webinar, the speakers will present an overview of the main features of this new standard and discuss the likely costs and benefits of its application.

Invitation to comment

The Institute has issued the following exposure drafts and would like to seek your comments by the respective due dates:

Proposed Amendments to Hong Kong Standard on Auditing 700 (Revised), Forming an Opinion and Reporting on Financial Statements and Proposed Conforming and Consequential Amendments to Other Hong Kong Standards on Auditing and Other Non-authoritative Materials by 15 December. It proposes disclosing the auditor’s name and practising certificate number in the auditor’s report for an audit of an entity’s financial statements prepared for reporting under the laws and regulations in Hong Kong conducted by a practice unit in accordance with Hong Kong Standards on Auditing.

Exposure Draft, PN 860.1 (Revised), The Audit of Retirement Schemes by 15 December. The revised practice note reflects the implementation of eMPF due to the amended Mandatory Provident Fund Schemes Ordinance and relevant guidelines.

Exposure Draft, PN 620.2 (Revised), Communication between the Auditor and the Insurance Authority by 30 November. Proposed revisions reflect conforming changes as a result of the Insurance (Amendment) Ordinance 2023, which provides the legal basis for the implementation of the risk-based capital regime.

Exposure Draft, PN 810.2 (Revised), The Duties of the Auditor of an Insurer authorized under the Insurance Ordinance by 30 November. It proposes revisions as a result of (a) the Insurance (Amendment) Ordinance 2023, which provides the legal basis for the implementation of the risk-based capital regime, and (b) the subsidiary legislation.

Exposure Draft, PN 820 (Revised), The Audit of Licensed Corporations and Associated Entities of Intermediaries by 28 November. It proposes to update for amendments to the Securities and Futures Ordinance and the subsidiary legislation following the implementation of the new regulated activity, Type 13. To assist members in understanding the Exposure Draft, speakers will provide an overview of the key proposed revisions to PN 820 (Revised) during the webinar on 29 November, along with a discussion of common pitfalls in relation to licensed corporations identified in the AFRC’s inspection report.

International Standard on Sustainability Assurance 5000, General Requirements for Sustainability Assurance Engagements (ISSA 5000)

The International Auditing and Assurance Standards Board (IAASB) has published the final standard of ISSA 5000, aimed at enhancing trust and confidence among investors, regulators and other stakeholders in sustainability information. This comprehensive, stand-alone standard is suitable for any sustainability assurance engagements. It will apply to sustainability information reported across various sustainability topics and prepared under multiple frameworks. The standard is also profession agnostic, supporting its use by both professional accountant and non-accountant assurance practitioners.

ICAEW publications

The Institute of Chartered Accountants in England and Wales (ICAEW) has released the following publications:

Moving quality management to the next level

The ICAEW remarks in this article that how, two years after the introduction of ISQM 1, firms tackle quality management fatigue and sustained improvement. It further discusses the risks of fatigue, the need for ongoing review and adjustment of the firms’ objectives, risks and responses, and emphasizes the importance of continuous monitoring and remediation processes.

The changing nature of group audits

This article provides insights from auditors on key revisions on ISA 600 (Revised), Special Considerations—Audits of Group Financial Statements (Including the Work of Component Auditors), changes of emphasis and focus, as well as good practices for group and component auditors.

Making audit sampling more efficient and effective

This ICAEW’s masterclass outlines how generative Artificial intelligence (AI) can help ensure that audit sampling is being handled correctly. The ICAEW also offers other masterclasses on topics like improving audit documentation, providing practical insights into the real-world application of AI technologies. Explore the ICAEW’s resources for more details.

Practical pointers on auditing cash flow statements

This article shares tips on common weaknesses and errors auditors may encounter when auditing cash flow statements.

Q&A: November 2024

ICAEW’s Technical Advisory Service addresses some topical questions related to going concern, implications of the group audit report, and more.

Trends in outsourcing and offshoring

ICAEW research offers insights into common drivers for outsourcing and offshoring audit work and key considerations among larger and mid-tier firms, exploring their practical implementation and the challenges.

If you are interested in accessing the ICAEW’s online audit and assurance resources, please contact Member Engagement Department at me@hkicpa.org.hk for free enrolment on a first-come, first-served basis. Spots are limited. Please note that your name and email address will be shared with the ICAEW for communication purposes.

The Institute’s Auditing and Assurance Standards Committee meeting

Minutes of the 420^th meeting are now available.

HKICPA resource centre

Access resources and publications at the Institute’s Resource Centre to the Code which will keep you updated on the latest ethics pronouncements. Watch this video showcasing on how to easily access these valuable resources.

Webinar series - Perspectives on sustainability disclosure

In the upcoming Episode 5 of the webinar series, “Perspectives on sustainability disclosure”, experts from the ISSB and guests will discuss developments and considerations as companies prepare for assurance of sustainability disclosures. Click here to register or view past episodes.

New report sets out global progress towards both mandated and voluntary corporate climate-related disclosures

According to the IFRS Foundation's Progress on Corporate Climate-related Disclosures—2024 Report, over 1,000 companies have referenced the ISSB in their reports and 30 jurisdictions are making progress towards incorporating ISSB Standards into their legal or regulatory frameworks. The report details the status of these jurisdictions, and provides insights into how companies are transitioning from disclosures prepared using the Task Force on Climate-related Financial Disclosures recommendations to disclosures prepared using ISSB Standards. A summary of the report's key findings is also included in the Financial Stability Board's 2024 progress report on Achieving Consistent and Comparable Climate-related Disclosures. Additionally, the IFRS Foundation conducted a separate analysis on how the 30 jurisdictions are approaching disclosure requirements for Scope 3 greenhouse gas emissions, industry-specific information, and sustainability-related risks and opportunities. To learn more about the findings of the report and the work of the ISSB, register for Episode 6 of the Perspectives on Sustainability Disclosure webinar series.

Decarbonization Strategy Workshop

In today’s ever-changing world, it is not a simple task to develop a strategy that effectively guides a company's journey toward mitigating greenhouse gas emissions. In addition to assessing emissions profiles, identifying potential decarbonization opportunities, setting meaningful targets and accurately disclosing progress are essential steps to formulating the optimal decarbonization strategy for the company. In the upcoming workshop on 29 November, speakers from KPMG will introduce decarbonization, explore how to determine decarbonization ambition, including target setting, as well as identifying decarbonization opportunities. The speakers will also discuss the monitoring and reporting of decarbonization efforts. Enrol now, if you haven't registered yet!

Integrated Thinking and Reporting Conference 2024—key takeaways

The 2024 IFRS Foundation Integrated Thinking and Reporting Conference took place in October in Milan. The event convened stakeholders from around the world to discuss the value of integrated reporting, including how it supports the adoption of ISSB Standards. More than 35 speakers from 15 countries shared insights on enhancing the quality of integrated reporting and reinforcing its value. Learn more about the six takeaways from these discussions on the future of integrated reporting.

News from HKEX

HKEX has announced the launching of the Hang Seng HKEX Stock Connect China Enterprises Index (SCCEA Index) on 21 November 2024. The SCCEA Index is the first co-branded index between HKEX and Hang Seng Indexes Company Limited (HSIL). It is a cross-market index tracking the 80 largest Chinese companies by market capitalization listed on the Hong Kong, Shanghai and Shenzhen stock exchanges which are traded on Stock Connect The index offers a comprehensive benchmark for investing in listed Chinese companies. The HKEX and HSIL websites will provide the methodology and additional information about the SCCEA Index from the index launch date.

Announcements by the Inland Revenue Department

Members may wish to be aware of the following matters:

Announcements by the government

Members may wish to be aware of the following matters:

Anti-money laundering (AML) notices and news

FATF publication on high-risk and other monitored jurisdictions

On 25 October, the Financial Action Task Force (FATF) published a statement regarding high-risk jurisdictions subject to a call for action, calling on its members and all jurisdictions to apply specific measures and actions on Iran, the Democratic People's Republic of Korea and Myanmar.

The FATF also issued a notice on jurisdictions under increased monitoring, referring to other jurisdictions that have been identified to have strategic deficiencies in their AML/ counter-terrorist regimes and that are working with the FATF to address these deficiencies. Bulgaria, Burkina Faso, Cameroon, Croatia, Democratic Republic of Congo, Mali, Mozambique, Namibia, Nigeria, Philippines, Senegal, South Africa, South Sudan, Tanzania, Vietnam and Yemen have had their progress reviewed by the FATF since June 2024 and updated statements are provided for these jurisdictions. Haiti, Kenya, Monaco, Syria and Venezuela chose to defer reporting. In addition, Algeria, Angola Côte d’Ivoire and Lebanon have been newly included on the list.

Sanctions update

The list of relevant persons published under section 31 of the United Nations Sanctions (Sudan) Regulation 2013 (Cap. 537 sub. leg. BF) was gazetted on 14 November. Please refer to the 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.

Other AML news

Publications from other organizations:

Half of companies have fully centralized finance processes from CFO.com
Why the future of digital design needs to be trauma-informed from Entrepreneur.com
What gen AI means for executive decision-making from Financial Management
Employers focusing on starting salaries and workload to ease pipeline pain from Journal of Accountancy
From job placement to disaster relief, McKinsey is using the power of AI for social good by McKinsey & Company

Disclaimer: Some sections contain external links and information from outside sources. We endeavour to link to reputable sources but the Institute is not responsible for the accuracy or content of the external site, and the content does not necessarily represent the views of the Institute. We recommend using your discretion when visiting these links.

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