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AFRC advocates healthy practices in auditor appointments and audit fee setting to safeguard public trust
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The Accounting and Financial Reporting Council (AFRC) has published an article titled “Upholding trust in capital markets: Maintaining healthy practices in auditor appointments and audit fee setting”. In the article, the AFRC highlights the encouraging progress that has been made in reducing late auditor resignations. As part of its ongoing efforts to maintain high audit standards in Hong Kong, the AFRC outlines further steps required to strengthen practices in auditor appointments and audit fee setting.
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HKICPA releases HKFRS S1 and S2 Guidance – Part 1
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The Institute has released HKFRS S1 and S2 Guidance – Part 1 (the Guidance). This practical resource is designed to support the implementation of HKFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information and HKFRS S2 Climate-related Disclosures by offering guidance on foundational topics.
It features:
- A step-by-step approach to addressing implementation challenges;
- Practical examples and insights from market practices; and
- Coverage of key areas, including mechanisms supporting the application of HKFRS Sustainability Disclosure Standards, reporting entity, value chain, sustainability-related risks and opportunities and materiality.
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Reminder - Institute live webinar: Enhancing Insurance Enterprise Risk Management (ERM) Framework under Hong Kong Risk-based Capital (HKRBC) Pillar 2
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The new HKRBC regime for the insurance industry took effect on 1 July 2024, introducing a three-pillar regulatory framework: Pillar 1, Pillar 2 and Pillar 3. Following our April webinar on insurers’ first annual submission to the Insurance Authority under Pillar 3, we are organizing another webinar on 10 September that will focus on the ERM framework under Pillar 2.
Pillar 2 is essential not only for accounting professionals directly involved in ERM, but also for those in accounting and finance functions, given their vital roles in supporting the implementation and effective operation of insurers’ ERM framework. Accounting professionals in the insurance sector should take this opportunity to deepen their ERM expertise, strengthen cross-functional collaboration, and contribute to the smooth and effective functioning of their organizations’ ERM framework.
Click here for more details about the webinar and to register.
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Institute live webinar on 2025 Year-End Closing – Financial Reporting Insights for Insurers
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After two full years of reporting experience under HKFRS 17 Insurance Contracts, insurers are now preparing for their third round of annual reporting. To facilitate a smooth close for the 2025 financial year, the Institute will host a live webinar on 27 October, providing timely reminders and practical insights tailored to the challenges faced by the insurance industry.
This webinar will cover:
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- Topical issues and common pitfalls encountered by insurers; and
- Key updates and areas of focus for the 2025 and upcoming reporting cycles, including highlights of HKFRS 18 Presentation and Disclosure in Financial Statements.
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For more details about the webinar, click here.
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E-learning: Financial reporting considerations for evolving tariff
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The recent tariffs imposed by the US government, along with the resulting market volatility, have become critical factors for entities preparing their financial statements, particularly those with June year-ends or interim reporting periods. This e-learning session is designed to provide timely and practical guidance on the financial reporting implications of these evolving tariffs.
In this session, the speaker will focus on how to assess and reflect the impact of tariff changes on various aspects of financial reporting, including:
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- going concern considerations;
- impairment of non-financial assets;
- recoverability of deferred tax assets;
- assessment of onerous contract;
- inventory valuation; and
- disclosure requirements.
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Join us to gain essential insights that will help you navigate these complex challenges in financial reporting.
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List of new and amended HKFRS
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The Institute has published the list of amended HKFRS and Interpretations that are applicable to accounting periods beginning on or after 1 January 2025.
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IASB July 2025 podcast & update
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The IASB podcast, highlighting preliminary decisions of the IASB at its July 2025 meeting, and a summary of the meeting, are now available.
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HKICPA technical training on auditing and assurance
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Join the Institute’s upcoming technical training workshop designed to enhance your auditing knowledge.
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AFRC video: Uncovering financial fraud by journal entry testing
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The AFRC video AFRC Connect Ep.3 – Uncovering financial fraud by journal entry testing (JET) explores how JET can detect management's "financial makeup tricks". This episode presents a case study in which the audit team used digital tools for analysis to discover hidden fraud risks, demonstrating how JET can reveal management's financial misconduct, ultimately revealing the management’s wrongdoing.
To familiarize yourself with JET, you may enrol in the Institute’s e-learning course Audit sampling and journal entry testing.
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How to apply the new HKSA for LCE?
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The Institute’s article in A Plus provides an overview of the application of the Hong Kong Standard on Auditing for Audits of Financial Statements of Less Complex Entities (HKSA for LCE). In particular, it explains how auditors assess whether the entity meets the eligibility criteria outlined in Part A of the standard.
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The Institute’s Auditing and Assurance Standards Committee meeting minutes
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Minutes of the 426th meeting is available.
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IESBA 2025-2026 Work Plan updated
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The International Ethics Standards Board for Accountants (IESBA) has approved updates to its 2025-2026 Work Plan to better support ethical behavior and independent judgment in an increasingly volatile and uncertain environment. The revised work plan reflects three key decisions:
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1. A resequenced approach to its Firm Culture and Governance Project: This approach reflects the IESBA’s leadership role in responding to ethical gaps in practice and strengthening public trust in the accountancy profession, while recognizing that the current volatile and uncertain context calls for enhanced support to market participants.
2. The SMART framework: A new stakeholder-centric strategic lens to guide its work, was approved to enhance the clarity, impact, and coherence of its activities, driving effective consistency and strategic alignment. SMART stands for:
- Simplification of processes and outputs;
- Mobilization of stakeholders to act with impact and purpose;
- Adoption support of the IESBA Code across jurisdictions;
- Responsiveness to stakeholders in the face of emerging risks and expectations; and
- Targeted Action by tailoring efforts and engagement to different stakeholders.
3. Enhanced support for real-world application: Recognising that robust standards require effective implementation, the IESBA is stepping up its support for jurisdictions and professionals adopting and implementing the Code. Therefore, the IESBA is slowing the pace of new standards to allow consolidation of recently issued standards, with no significant new standards expected before 2027.
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Important ethics and independence considerations for professional accountants regarding investment from private equity organizations
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As private equity (PE) investment may introduce a variety of changes to a firm, including structural, strategic and operational changes, the IESBA has released a new Staff Alert titled “Private Equity Investment in Accounting Firms: Key Ethics and Independence Considerations”. This alert highlights key ethical matters that accounting firms should pay particular attention to when considering or accepting investment from PE organizations. The alert:
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- emphasizes the importance of firms maintaining ongoing monitoring for changes in clients, services, business and network relationships, and other relevant factors with potential ethics and independence implications, during both the pre-investment phase and after completion of the PE transaction, and continuing to act in the public interest.
- underscores in the context of PE investment that compliance with the Code by firms enhances the quality and consistency of the services they provide and underpins public trust and confidence in their work.
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This publication does not constitute an authoritative or official pronouncement of the IESBA.
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What’s New for the IESBA Code: 2024 Edition and beyond
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The International Federation of Accountants (IFAC) article provides a high-level overview of the changes included in the 2024 edition of the IESBA Code, as well as horizon scanning for future developments:
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- Revisions effective for audits of financial statements for periods beginning on or after 15 December 2024
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- Revisions to the definition of "public interest entity" (PIE), “audit client” and
"group audit client”; and
- Technology-related revisions
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- Revisions for tax planning and related services which will become effective after 30 June 2025.
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IESBA meeting summary
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Highlights to the IESBA meeting held in June 2025 are now available.
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HKICPA trainings on sustainability-related topics
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The Institute is committed to enhancing the capabilities of relevant stakeholders by equipping them with the professional knowledge necessary to navigate the dynamic landscape of sustainability. Our technical training sessions are specifically designed to equip our members to apply the Institute’s professional standards to sustainability-related topics:
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- 20 August: Groups Sustainability Assurance Engagements
- 3 September: Risk Identification and Assessment
- 17 September: Responding to Risks of Material Misstatement
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Q&As on HKSSA 5000, General Requirements for Sustainability Assurance Engagements
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The Institute has issued a staff publication titled “Questions and Answers (Q&As) on HKSSA 5000, General Requirements for Sustainability Assurance Engagements”. These Q&As should be read in conjunction with the Institute’s HKSSA 5000 and are intended for general guidance only. They do not necessarily reflect the views of the Standard Setting Department, the Institute, the Council, or any of its committees.
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Additional IESBA implementation support materials for IESSA
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As part of its comprehensive implementation support program, the staff of the IESBA has released two implementation support publications to help sustainability assurance practitioners understand and apply the International Ethics Standards for Sustainability Assurance (including International Independence Standards) (IESSA):
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- The Key Differences Between IESSA and Parts 1 to 4A of the Code provides an overview of how the IESSA compares to the ethics and independence provisions in the IESBA Code that apply to audits of financial statements. It aims to support firms that already follow the Code in understanding and implementing the IESSA for sustainability assurance engagements. For reference purposes, the publication is accompanied by a marked-up version of the IESSA showing changes from the corresponding sections of the existing Code.
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- The List of Prohibitions for PIEs in IESSA summarizes the specific interests, relationships, non-assurance services and other circumstances prohibited under the IESSA when performing sustainability assurance engagements for PIEs. It serves as a high-level reference to help sustainability assurance practitioners better understand the prohibitions in the IESSA.
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In addition, the IESBA has released three short explainer videos introducing the IESSA and illustrating how sustainability reporting professionals navigate real-world ethical challenges.
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2025 IFRS Sustainability Symposium
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The 2025 IFRS Sustainability Symposium will be held under the theme 'Pathways to Adoption' on 30 October in London. Building on the success of last year's symposium in New York City, this year's event will explore the implementation of sustainability disclosure standards in greater depth. The symposium will feature breakout sessions offering expert insights to guide you through the implementation process. Featured sessions include:
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- Panel discussion: The strategic benefits of adopting ISSB Standards from corporate, investor and regulatory perspectives
- Fireside chat: Why connectivity with financial statements matters and how it works
- Panel discussion: Enhancing industry-based disclosure standards
- Panel: Sustainability information that supports decision-making
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Registration is open for both virtual and in-person participants. Book by 12 September to receive an early bird discount. Visit the conference website to see the latest agenda and register.
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ISSB July 2025 podcast & update
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The ISSB podcast, highlighting preliminary decisions of the ISSB at its July 2025 meeting, and a summary of the meeting, are now available.
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HKFRS S1 and S2 Implementation Platform
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You are welcome to submit technical questions related to the implementation of HKFRS S1 and S2. Questions that meet the submission criteria will be considered for discussion at the next meeting in November. The deadline for submissions is 21 October.
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News and invitation to comment from the Hong Kong Exchanges and Clearing Limited (HKEX)
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HKEX has announced its plan to launch the HKEX Issuer Access Platform (HKEX IAP) in 2026. The HKEX IAP is a web-based platform for interaction and communication between listed issuers and HKEX, serving as the primary secured communication channel between listed issuers and HKEX, through which regulatory announcements are submitted and published and interactions made with HKEX’s Listing Division on regulatory matters. The HKEX IAP will feature a dedicated portal on the HKEX website, equipped with smart compliance tools (dashboards, workflow trackers, etc.) to help issuers fulfil their compliance and reporting requirements. A trial version of HKEX IAP will be available in late 2025 and listed issuers will be able to start using the platform in phases, beginning in the second quarter of 2026.
Separately, HKEX has published the conclusion to its consultation on IPO price discovery and open market requirements. Key changes to the listing requirements, coming into effect on 4 August, include those concerning the minimum bookbuilding and placing tranche, allocation to public subscription tranche, initial public float and free float.
The HKEX is inviting public comments on its further consultation on proposed changes to ongoing public float requirements. To participate, you can complete and submit the questionnaire available on the HKEX website before the comment period ends on 1 October.
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Invitation to comment from the Securities and Futures Commission (SFC)
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The SFC has launched a public consultation on draft amendments to the Securities and Futures (Financial Resources) Rules and related guidelines. The proposed changes aim to implement a set of internationally comparable capital requirements for licensed corporations engaging in over-the-counter derivative activities. The SFC invites comments by 13 October.
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Tender for Providing Services to Complete Preliminary Examination in Bankruptcy Cases
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The Official Receiver’s Office has issued a tender notice to invite interested insolvency practitioners to submit a tender for providing services to complete preliminary examinations in bankruptcy cases. More details are available at: https://www.oro.gov.hk/eng/announcements/tender.html.
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Announcements by the Inland Revenue Department (IRD)
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Members may wish to be aware of the following matters:
- The IRD alerted members of the public to fraudulent emails purportedly issued by it, which indicates its intention of conducting tax audits on the recipients. The IRD reiterates that it has no connection with the emails and has reported the case to the police for further investigation. Please be reminded not to open any suspicious emails or visit hyperlinks provided in such emails.
- Legislative Council Question (LCQ) 3: Non-residential properties
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Announcements by the government
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Members may wish to be aware of the following matters:
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Anti-money laundering (AML) notices and news
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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.
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Other AML news:
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Publications from other organizations:
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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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