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The Hong Kong4 ACCOUNTANT APRIL 2002

SOCIETY NEWS

The 2002 Council

The Council approved the issuance of the following:• the proposed amendments to PN 870 “The Assessments

of Certification Authorities under the ElectronicTransactions Ordinance”

• the SSAP 35 “Accounting for Government Grants andDisclosure of Government Assistance” as a final statementwhich will become effective for financial statementscovering periods beginning on or after 1 July 2002

The Council also approved the issuance of the followingDraft Interpretations which are based on the equivalent SICInterpretations for a one-month consultation period:• Proposed Interpretation 14 “Evaluating the Substance

of Transactions Involving the Legal Form of a Lease”(based on SIC-27)

• Proposed Interpretation 15 “Business Combinations –Date of Exchange and Fair Value of Equity Instruments”(based on SIC-28)

• Proposed Interpretation 16 “Disclosure – ServiceConcession Arrangements” (based on SIC-29)

• Proposed Interpretation 17 “Revenue – Barter TransactionsInvolving Advertising Services” (based on SIC-31)

• Proposed Interpretation 18 “Consolidation and EquityMethod – Potential Voting Rights and Allocation of

Ownership Interests” (based on SIC-33)

The Council approved the following appointments/nominations:• Mr Colin Chau, Director of Professional Compliance,

as the Society’s representative to serve on the HongKong Management Association judging panel for the BestAnnual Reports Award 2002

• Ms Winnie Cheung, Senior Director, as the Society’srepresentative to serve on another term on the Informa-tion Technology Services Department’s AdvisoryCommittee on Code of Practice for RecognisedCertification Authorities

• Mr Michael Chan as the Society’s representative toattend the IFAC IT Chairs Meeting, scheduled for 8-9April 2002 in Amsterdam

The Council approved the following sponsorships:• the Hong Kong Baptist University’s Academic Festival

2002• the Hong Kong Inter-Tertiary Association’s Exhibition• the Hong Kong University of Science & Technology’s

Accounting Week 2002• the University of Hong Kong’s Business Workshop 2002

(Front row, from left) Lee Kai-fat (Registrar and Secretary-General); Judy Tsui; Andy SC Lee; Wong Tak Wai, Alvin (President);David Tak-kei Sun (Vice-President); Edward KF Chow (Vice-President); Cho Lung Pui Lan, Stella; Mark C Fong

(Back row, from left) Wilson Fung; Carlson Tong; Gordon WE Jones; Kennedy Tat-yin Liu; Roger Best; Paul MP Chan;Doug Oxley; Shum Man-to; Michael KH Chan

Council Announcements

The Hong KongACCOUNTANT 5APRIL 2002

SOCIETY NEWS

Mr Alvin Wong, the President, attended the following eventson behalf of the Society in the past months:• Environmental Campaign Committee’s 2001 Hong Kong

Eco-Business Awards Presentation Ceremony on 21January

• Hong Kong Institution of Engineers’ 27th Annual Dinneron 21 February

• Annual Spring Reception of the Liaison Office of theCentral People’s Government in the HKSAR on 21February

President’s Engagements• Spring Cocktail Reception of the Hong Kong

Association of Property Management Companies, HongKong Institute of Housing, Hong Kong Institute of RealEstate Administration and Chartered Institute ofHousing Asian Pacific Branch on 4 March

• ACCA Hong Kong’s Spring Dinner on 5 March• Society of Chinese Accountants & Auditors’ Spring

Dinner on 7 March• Vocational Training Council’s 20th Anniversary

Reception on 19 March

Statistics UpdateAs of 15 March 2002, the Society’s statistics were as follows:

19,301 Members3,023 Practising Certificate Holders1,046 Firms103 Corporate Practices

Public Service Appointments

Mr James Kong Tze-wing (江子榮) has been appointed amember of the Fish Marketing Advisory Board for one yearwith effect from 1 January 2002.

Mrs Grace Lee Chan Ka-yan (李陳嘉恩) has been appointeda member of the Vocational Training Council’s ChineseCuisine Training Institute Training Board with effect from1 January 2002 and up to 31 March 2003.

Public Service Appointments

Mr Vincent Wan Shui-tong (尹樹棠) has been re-appointedan adjudicator of the Registration of Persons Tribunal fortwo years with effect from 1 March 2002.

Mr Canning Fok Kin-ning (霍建寧) has been appointed amember of the Services Promotion Strategy Group for oneyear with effect from 1 April 2002.

Cocktail Reception for New MembersThe Society held a cocktail reception on 20 March at

the World Trade Centre Club to welcome new memberswho joined the Society between September 2001 andJanuary 2002. More than 40 new members, Council andcommittee members attended.

At the reception, Mr Wong Tak Wai, Alvin, thePresident; Mr Lee Kai-fat, the Registrar & Secretary-General; and Mr Richard Tse, Deputy Chairman of theCommunity Services Committee, addressed members on

the Society’s latest developments, structure, services andthe Accountant Ambassadors Programme.

The occasion provided an excellent opportunity for newmembers to meet and network with fellow members in theprofession.

A happy get-togetherMr Alvin Wong, the President (right), chatting withtwo new members


SOCIETY NEWS

The Council recently appointed members to its committees for 2002. At present, there are five statutory and 32 non-statutory committees under the Council, as well as 10 working groups that deal with ad hoc matters. The composition ofthe various committees and working groups for 2002 is as follows:

Appointing Committees for 2002

Statutory CommitteesDISCIPLINARY PANELMr Gabriel AzedoProf Antonio J Barreira*Mr Mark Bradley*Mr Chan Sai HoiProf TS Chan*Prof Kevin Chen*Mr Marvin KT CheungProf Raymond CP Chiang*Mr Anthony WK Chow*Mr Paul Chow*Mr Con Conway*Mr Anthony EspinaProf JCY Han*Mr Dudley HardingProf Richard Ho*Miss Angelina KwanMr Quinn YK LawProf Leung Chun Ming*Mr Leung Tai Chiu, AntonyMr Lo Kai Ming, CharlesMr Tim TL LuiMr Ma Ching Nam*Prof Abdul Majid*Mr Selwyn MarMr Vernon MooreMr Mark Taylor*Mr Herbert HK Tsoi*Mr Bernard WilkinsonMr Peter HY WongMr Wong Kwai Huen*Mr Patrick LT WongMr Wu Ting Yuk, AnthonyMr Patrick KC YeungMr Yu Hon To, David

EXAMINATIONS BOARDMr Doug Oxley (Chairman)Mr Kennedy Tat-yin Liu (DeputyChairman)Mr Patrick KC Yeung (DeputyChairman)Ms Mimosa KL ChanMr Edward KC ChiuDr Cho Lung Pui Lan, StellaMr Dennis CO ChungMr Richard HoMr Kwan Hong, Ricky*Mr Larry LK KwokMr Paul Neale*Ms Vivian SunMr Stephen Weatherseed

Ms Catherine YenMr David SO Yip

INVESTIGATION PANELMr Albert AuMr Tom ChanDr Chan Koon HungMr Charles ChowMr Kenneth ChungMr Nicholas P EtchesMr PM KamMr RJ KenrickMr Johnson KongMr Larry LK KwokMr Joseph M LaiMr Lam Hon MingMr John LeesMr Albert KK LiMr Meocre LiMr Joseph LoMr ML ManMr Nelson MiuMr KG MorrisonMr Nigel ReidMr Dennis WongMr Thomas YT WongMr Raymond Yung

PRACTICE REVIEW COMMITTEEMr KG Morrison (Chairman)Mr Lam Hon Ming (Deputy Chairman)Mr Robin Radcliffe (Deputy Chairman)Mr Albert AuMr Francis ChanMr TS ChanMr Charles ChowMs Ivy SL ChuaMr Philip FungMs Elizabeth LawMr Louis LeungMs Pauline LeungMr Michael PangMr Philip TsaiMr David TsoiMr Dennis Wong

REGISTRATION ANDPRACTISING COMMITTEEMr Roger Best (Chairman)Mr Mark C Fong (Deputy Chairman)Mr David Tsoi (Deputy Chairman)Mr Floyd ChanDr Cho Lung Pui Lan, Stella

Mr Wilson FungMr Andy SC LeeMr Kennedy Tat-yin LiuMr Doug OxleyMr Richard SunMr Patrick LT Wong

Non-Statutory CommitteesACCOUNTANCYACCREDITATION BOARDMr Roger Best (Chairman)Mr Stephen Chang (Deputy Chairman)Mr Doug Oxley (Deputy Chairman)Prof Gary C Biddle*Mr Edward KC ChiuMiss Fionna KongProf Amy Lau*Mr Richard KP TseProf Judy TsuiMs WS Wong*

ACCOUNTING STANDARDSADVISORY PANELMr PM Kam (Chairman)Mr Roger Best (Deputy Chairman)Mr Charles GrieveMr Johnny CD MaoMr Vernon MooreMs Estella NgMr Shum Man-toMr Carlson TongProf Judy Tsui

ADMINISTRATION ANDFINANCE COMMITTEEMr Edward KF Chow (Chairman)Mr Michael KH Chan (DeputyChairman)Mr Wilson Fung (Deputy Chairman)Mr Albert AuMs Margaret KK Chiu*Mr Anthony TY Lau*Mrs Yvonne LawMr Samuel LeeMr Doug OxleyMr David Tak-kei SunMs Katherine Tsang*

AUDIT COMMITTEESir Gordon M Macwhinnie (Chairman)Mr PM KamMr Joseph M LaiMr Tim TL Lui


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Mr Aloysius Tse

AUDITING AND ASSURANCESTANDARDS COMMITTEEMr David Tak-kei Sun (Chairman)Mr Charles Chow (DeputyChairman)Mr Kennedy Tat-yin Liu (DeputyChairman)Mr Andrew BennettMr Patrick Cheng*Mr Richard GeorgeMs Fanny LiMr Shum Man-toMr Tai Hay YuenMrs Jeanette WaMr Paul F WinkelmannMs Shirley WongMr Desmond Yuen

COMMUNITY SERVICESCOMMITTEEMr Kennedy Tat-yin Liu (Chairman)Mr Michael KH Chan (DeputyChairman)Mr Richard KP Tse (DeputyChairman)Mr Cheng Kin ChungMs Susanna CM ChingMrs Cindy MK ChowMr Ho Tze TuMr Kong Tze WingMiss Pak Miu Wa, DorothyMr Kenneth PoonMr Tam Hung Biu, BillyMr Peter WanMr Wong Wai Keung, FrederickMr Andrew KK WuMr Louie MW Wu

COMPLAINTS PANELMr Chan Chow, John (Convenor)Mr Simon BladeMs Barbara ChanMr Andy ChoiMr Charles ChowMr Raphael DingMr Patrick FitzgeraldMr William GeeMr Richard GeorgeMr Paul HebditchMr Philip HilliardMr Alan JohnsonMr Johnson KongMr Benny KB KwokMr Lam Hon MingMr Kenneth LamMr Jonathan LeongMr Alden Leung

Ms Ruby LeungMr Simon LeungMr Keith LieMr Simon MorrisMr Robin RadcliffeMr David SmithMr Tai Hay YuenMr Alan TangMr Tse Ping KwongMr Jim WardellMr Paul WinkelmannMr Richard WinterMr Dennis WongMs Maria XuerebMs Catherine YenMr Raymond Yung

CONTINUING PROFESSIONALDEVELOPMENT COMMITTEEMr Doug Oxley (Chairman)Dr Cho Lung Pui Lan, Stella(Deputy Chairman)Mr Leo Lee (Deputy Chairman)Mr Paul CC ChanMr Sherman CheungMr Derry FongMr Philip HilliardMs Elizabeth LawMr Gerald RedmondMr Henry ToMr Philip TsaiMr Stephen WeatherseedMr Patrick LT WongMiss Lesley Yeung

CORPORATE GOVERNANCECOMMITTEEMr David Tak-kei Sun (Chairman)Mr Quinn YK Law (DeputyChairman)Prof Judy Tsui (Deputy Chairman)Mr Albert AuMr Michael KH ChanMr David ChengMr Richard GeorgeMr Gordon WE Jones*Mr Peter NixonMr James SiuMr Richard SunMr Carlson TongMs Nancy TseMr Jim WardellMiss Alison Wong

CORPORATE SERVICESCOMMITTEEMr Andy SC Lee (Chairman)Mr Wilson Fung (Deputy Chairman)Mr Kevin Yuen (Deputy Chairman)

Mr Wilson CS KwokMiss Lam Ching KaMr Lawrence WC LauMr Kennedy Tat-yin LiuMr Frank YC LynMr Gabriel Tam*Mr Carlson TongMr Joe PS Tsang

EDITORIAL BOARDMr Stephen Lau (Chairman)Dr Cho Lung Pui Lan, Stella(Deputy Chairman)Dr Steven K Luk (Deputy Chairman)*Mr Chow Wai Yin, WilsonMr Benny KB KwokMs Joanne O’Callaghan*Mr Anthony TamMr David SO Yip

ETHICS COMMITTEEMr Mark C Fong (Chairman)Mr Edward KF Chow (DeputyChairman)Mr KG Morrison (Deputy Chairman)Mr Albert AuMs Barbara ChanMr Stephen ChangMr Roger KnightMr William Lee*Mr Doug OxleyMr Michael TL PangMr Shum Man-toMr David TsoiMr Louis Wong*Ms Isabelle Young

EXPERT PANEL ON BANKINGMr Simon Tsang (Convenor)Mr Lam Hon MingMr Babak NikzadMs Maria XuerebMr Raymond Yung

EXPERT PANEL ON INSOLVENCYMr John Lees (Convenor)Mr Paul MP Chan (Deputy Convenor)Mr Alan Tang (Deputy Convenor)Mr Charles Booth*Mr David HagueMr Darach HaugheyMr Nick HillMr Johnson KongMs Ruby LeungMr Stephen Liu*Mr Rupert Purser*Mr Mark Sterling*Mr Gabriel TamMr Kenny Tam


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Mr John Toohey*Mr Jim Wardell

EXPERT PANEL ON INSURANCEMr Philip Hilliard (Convenor)Mr Michael KH ChanMr Max ChenMr CF Choy*Mr Nick KittoMr Ken McKelvieMr Jimmy PunMr Stephen RoderMr Paul WinkelmannMr ST Yuen

EXPERT PANEL ON LEGALMATTERSMr Carlson Tong (Convenor)Mr Peter Griffiths (Deputy Convenor)*Mr Roy Huang*Mr Clement Shum*Ms Teresa TongMr William YH TsangMr Stephen Yam

EXPERT PANEL ON LISTINGMr Carlson Tong (Convenor)Mr Edward KF Chow (DeputyConvenor)Mr Kenneth Lam (Deputy Convenor)Mr Floyd ChanMr Phil ChanDr Michael FirthMr Larry KwokMr Leung Heung Ying, AlvinMr Kennedy Tat-yin LiuMs Katherine LohMr John Maguire*Mr Daniel SL ShamMr Henry ToMiss Stephanie WongMr Patrick KC Yeung

EXPERT PANEL ON SECURITIESMr Colin Shaftesley (Convenor)Mr Phil ChanMr Cheng Kwok Kin, PaulMr Sherman CheungMr Chris DonovanMr Carlyon Knight-Evans*Mr Alex KwokMs Fanny LiMr Keith LieMr Bonn LiuMr David Tak-kei SunMr Patrick KC Yeung

FINANCIAL ACCOUNTINGSTANDARDS COMMITTEEMr Roger Best (Chairman)Mr Bernard Wilkinson (DeputyChairman)Mr Paul F Winkelmann (DeputyChairman)Mr Billy WN ChanMs Olivia CheungMr Edward KF ChowMr Tommy FungMr Charles GrieveMr Philip HilliardMs Sheila PattleMr Christopher RaperMr Nigel ReidMr Stephen TaylorProf Judy TsuiMr Andrew Williamson

FINANCIAL MANAGEMENTCOMMITTEEMr Edward KF Chow (Chairman)Mr Patrick KW Chan (DeputyChairman)Mr Alan Wong Chiu Ming (DeputyChairman)Mr Ronald ChanMr Paul ChengMr Chew Fook AunMr SY ChoiMr Peter ChoyMr Wilson FungMr Roger HendersonMr Steven HuiMr Quinn YK LawMr Meocre LiMr Guy LookMr James Siu

INFORMATION TECHNOLOGYCOMMITTEEMr Michael KH Chan (Chairman)Mr Edwin Cheung (Deputy Chairman)Ms Susanna Chiu (Deputy Chairman)Mr John Barnes*Mr Tony ChanMr Vincent ChanMr Con Conway*Mr Louis YY HoMs Lusan HungMr David LiMr Gregory LoMr Kenneth PoonMr Victor TanMr Paul Tsoi*Mr Ricky Woo*

INSOLVENCY EDUCATIONSTEERING COMMITTEEMr Doug Oxley (Chairman)Mr John Lees (Deputy Chairman)Mr Jeremy Glen*Mr Johnson KongMs Elizabeth LawMr Kenny TamMr Alan TangMs Jane TingleMr John Toohey*Mr David SO Yip

IT STRATEGY STEERINGCOMMITTEEMr Michael KH Chan (Chairman)Mr Edwin Cheung (Deputy Chairman)Mr Tony ChanMr Joseph Leung*Mr Kenneth PoonMr Gary WongMr Wong Wai Keung, FrederickMr Adrian Yeung

MAINLAND AFFAIRSCOMMITTEEMr Patrick Cheng (Chairman)Mr Paul MP Chan (Deputy Chairman)Mr Edward KF Chow (DeputyChairman)Mr Alfred Shum (Deputy Chairman)Mr Paul CC ChanProf Chan Koon HungMr Louie ChoiMr Mark C FongMr Heng Kwoo SengMr Johnson KongProf Amy Lau*Mr Meocre LiMr William YH TsangMr Peter WanMr Alan Wong Chiu MingMs Debra WongMr Desmond Yuen

PR STRATEGY STEERINGCOMMITTEEMr Tim TL Lui (Chairman)Mrs Grace Lam (Deputy Chairman)*Prof Judy Tsui (Deputy Chairman)Mr Michael KH ChanMr Paul MP ChanMs Rebecca Lam*Ms Betty Lee*Mr Kennedy Tat-yin LiuMs Catherine Yen


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PROFESSIONAL RISKMANAGEMENT COMMITTEEMr Ken McKelvie (Chairman)Mr Roger Knight (Deputy Chairman)Ms Elizabeth Law (Deputy Chairman)Mr Albert AuMr Patrick FitzgeraldMr Ng Shiu HongMr Nigel ReidMr Kenny TamMr William YH Tsang

PROFESSIONAL STANDARDSMONITORING COMMITTEEMr Carlson Tong (Chairman)Mr Wilson Fung (Deputy Chairman)Ms Rebecca ChanMr Charles ChowMrs Norma HallMr Paul HebditchMr Jonathan Russell LeongMs Estella NgMr Michael SimMr Tse Ping KwongMs Debra WongMr Thomas YT Wong

RESEARCH AND SURVEYCOMMITTEEMr Carlson Tong (Chairman)Dr Cho Lung Pui Lan, Stella(Deputy Chairman)Mr Edward KF ChowMr Mark C FongMr Wilson FungMr Teddy Iu*Miss Fionna KongMs Elizabeth LawMr Andrew CC MaMr CY TangProf Samuel Tung

SMALL AND MEDIUMPRACTITIONERS COMMITTEEMr Paul MP Chan (Chairman)Mr Mark C Fong (Deputy Chairman)Mr Patrick LT Wong (DeputyChairman)Mr Au Chau Ki, WilkieMr Albert AuMr Charles WD ChanMr Billy WN ChanMr Philip FungMr Daniel KL LeeMr Tai Hay YuenMr Thomas WS WongMr Thomas YT WongMr Louie MW WuMs Yung Wing Sheung, Amy

STUDENT TRAINING ANDDEVELOPMENT COMMITTEEDr Cho Lung Pui Lan, Stella(Chairman)Mr Tse Yau Bong (Deputy Chairman)Mr David SO Yip (Deputy Chairman)Ms Amy YF ChowMs Ruth HS KungMr Wilson CS KwokMs Lam Ching KaDr Peter TY LauMr Mike LiMiss Lillian LiangMr Paul Neale*Mr Richard S SimmonsMiss Alison WongDr Joseph SW Yau

TAXATION COMMITTEEMr Tim TL Lui (Chairman)Mr Paul MP Chan (Deputy Chairman)Mrs Yvonne Law (Deputy Chairman)Miss Debbie AnnellsProf Chan Koon HungMs Florence ChanMr Daniel CheungMs Chiu Kwai Fong, FlorenceMr Charles ChowMs Elizabeth LawMr Leung Wo PingMr David SmithMr David H SouthwoodMr Tai Hay Yuen

WEBTRUST COMMITTEEMr Con Conway (Chairman)*Mr Michael KH Chan (DeputyChairman)Mr William Gee (Deputy Chairman)Mr John Barnes*Mr Vincent ChanMs Susanna ChiuMr Gerry KH LiMr Gregory LoMr Victor TanMr Andrew Watkins*Mr Stephen WeatherseedMr Gary Wong

Working GroupsWorking Groups

ACCOUNTANTS’ REPORT TASKFORCEMr David Tak-kei Sun (Chairman)Mr Richard George (Deputy Chairman)Mr Kennedy Tat-yin Liu (DeputyChairman)Mr Paul ChengMr Charles ChowMr Edward KF Chow

Mr Paul HebditchMr Alan MorganMr Daniel ShamMr Paul F Winkelmann

GAAP FOR SMALL BUSINESSESWORKING GROUPMr Paul MP Chan (Chairman)Mr Billy WN Chan (Deputy Chairman)Mr PM Kam (Deputy Chairman)Mr Clement ChanMr TS ChanMr Raymond ChengMr Philip FungMrs Norma HallMr Albert LiMs Fanny LiMr Tai Hay YuenMr Bernard Wilkinson

INTERNATIONAL RECOGNITIONTASK FORCEMr Roger Best (Chairman)Mr Wong Tak Wai, Alvin (DeputyChairman)Mr PM KamDr Li Ka-cheung, EricMr Doug OxleyMr David Tak-kei SunProf Judy Tsui

JOINT GOVERNMENT/HKSACOMPANIES ORDINANCEREVIEW WORKING GROUPHKSA representativesMr Roger Best (Chairman)Mr Peter Griffiths*Mr Albert LiMr Tai Hay YuenMr Bernard WilkinsonMr Paul F WinkelmannMs Winnie Cheung

Government’s representativesMr Gordon WE JonesMr Esmond LeeMr CW ChengMr Charles GrieveMs Anita Tong

LANGUAGE PROFICIENCYWORKING GROUPMr Doug Oxley (Chairman)Prof TS Chan (Deputy Chairman)*Mr Wilson CS Kwok (DeputyChairman)Ms Maria ChanMs Cecilia LeeProf Abdul Majid*


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Prof Samuel TungMrs Lesley YC Wong*Mr Allan Yun Leun YeungMs Jennifer Yuet Fong Yip Li

MEMBERSHIP NEEDS SURVEYTASK FORCEMr Carlson Tong (Chairman)Mr Paul MP ChanMr Edward KF ChowMr Wilson FungMs Elizabeth LawMr Kennedy Tat-yin LiuProf Lui Ping Keung*

ORGANISING COMMITTEE OFWORLD CONGRESS OFACCOUNTANTS 2002Mr Peter HY Wong (Chairman)Mr Edward KF Chow (DeputyChairman)Mr David Tak-kei Sun (DeputyChairman)Mr Dennis SS Chan*Mr Michael KH ChanMr Brian WK Chan

Mrs Nellie FongMr Samuel LeeMr Tim TL LuiMr Doug OxleyMr Carlson TongMr John Wan*Mr Wong Tak Wai, Alvin

PRACTICAL EXPERIENCE TASKFORCEMr PM Kam (Chairman)Mr Roger Best (Deputy Chairman)Dr Cho Lung Pui Lan, StellaMr Peter ChowMs Chu Yuet-Lai, GeorgianaMr Kenneth ChungMr Timothy HoMr Leung Wo PingMr Paul Neale*Mr Doug Oxley

STANDARD-SETTINGSTRATEGY REVIEW TASKFORCEMr PM Kam (Chairman)Mr Roger Best (Deputy Chairman)

Mr David Tak-kei Sun (DeputyChairman)Mr Albert AuMr Billy WN ChanMr Edward KF ChowMr Mark C FongMr Charles GrieveMr Johnny MaoMr Vernon MooreMs Estella NgMr Shum Man toMr Carlson TongProf Judy TsuiMr Wong Tak Wai, Alvin

TASK FORCE TO STUDY THEDESIRABILITY FORESTABLISHING GUIDELINESFOR DISCIPLINARY ORDERSMr Selwyn Mar (Chairman)Prof TS Chan*Mr Anthony WK Chow*Ms Elizabeth LawMr Patrick KC Yeung

* Non-HKSA member


SOCIETY NEWS

The Hong Kong Society of Accountants was invited bythe LegCo Panel on Financial Affairs to attend a specialmeeting on the initiatives to strengthen Hong Kong’scorporate governance regime on 14 March 2002. Themeeting was also attended by representatives of theFinancial Services Bureau, the Companies Registry, theStanding Committee on Company Law Reform, theSecurities & Futures Commission and the Hong Kong StockExchange and Clearing Co. Ltd.

At the meeting, the Society was represented by thePresident, the two vice Presidents, the Registrar and theSenior Director. The President Mr Alvin Wong give an oralpresentation in Chinese, setting out the HKSA’s contributionsand plans in corporate governance and related issues, as wellas the Council’s current position with respect to the areas of:• Standard-setting,• Auditors’ role and audit independence,• Regulatory framework,• Corporate governance practices and• Financial reporting models – Looking into the future

This important statement, in its entirety, is reproducedbelow. The oral presentation was based on a writtensubmission, followed by the speaking notes of the Secretaryfor Financial Services Mr Stephen Ip, and the Chairman ofthe Standing Committee on Company Law Reform MrAnthony Rogers on the same occasion.

President’s Address on CorporateGovernance1. We welcome this opportunity to contribute our views to

the discussion of the subject “Initiatives to StrengthenHong Kong’s Corporate Governance Regime”.

2. In your invitation to attend this special meeting of thePanel, specific references were made to the collapse ofEnron, a listed company in the US, and the concerns towhich this has given rise in relation to the ethics andstandards of practices of the accountancy profession andcorporate governance.

3. We understand that we are specifically requested to briefthis Panel on the ethics and practices of the accountingprofession in Hong Kong as a central issue within thewider subject of Hong Kong’s corporate governance thatis under discussion today.

4. While we maintain that the Enron case is an isolatedincident and is rare, we would like to say at the outsetthat the accounting profession has registered and takesseriously the public concerns expressed in recent weeks

Statements Prepared by Hong Kong Society ofAccountants and Presented before the LegislativeCouncil Panel on Financial Affairs

following the Enron affair in the States. HKSA workswithin and is an integral part of the body that representsthe world accounting profession, the InternationalFederation of Accountants (IFAC). Our profession, underthe leadership of IFAC, readily accepts that theprofession must contribute to reducing the occurrenceof major failures such as Enron, and we will play ourpart in the drive for greater quality and consistency ofaccounting and auditing services and will continue ourwork to improve corporate governance.

5. That said, we do not propose to discuss in this meetingthe specific accounting and auditing issues surroundingEnron. We do not know enough about the specifics ofthe case and the transactions involved, nor the complexand intricate systems in the United States of Americaand the environment in which they operate, to makevalue judgments. In any case, business failures seldomhave simple causes, but are usually the result of a morecomplex interplay of various factors. Reform should bean on-going process rather than a knee-jerk reaction tosudden events or failures.

6. At the end of the day, all interested parties includingmanagement, auditors, banks, analysts, regulators,standard setters, the government and the investing publicwill learn from the Enron affair. Issues will be identifiedand solutions will be found to address them.

7. We plan to watch closely and learn from the recentevents and proposed reforms in the US. If evidenceemerges suggesting that changes are required in HongKong, we will, of course, do our best to ensure that allthat needs to be done in order to maintain the highestpossible standards is in fact done.

8. We hope, however, to make use of the opportunity inthis meeting to respond to some questions and doubtsraised by members of this Panel on a number of areasregarding Hong Kong’s financial reporting standards,the role of the audit and audit independence and corporategovernance practices.

9. We believe that concerns in these areas, whileunderstandable given the widely reported problems thathave been unfolding in the US following the Enrondebacle, must be put into perspective.

10. We feel sure that the on-going efforts of our professionand others in this community have made significantprogress towards building a sound and solid financialreporting foundation for Hong Kong. These efforts are


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on-going and we do not think we should let individualevents overshadow them. Afterall, Rome was not builtin one day.

Standard-setting11. Let us turn first of all to HKSA’s standard-setting

regime.

12. HKSA sets accounting, auditing and ethical standards,compliance with which is a prerequisite for all HKSAmembers, whether they act as auditors, preparers/CFOs,executive or independent directors.

13. HKSA has since 1993 laid down the policy to modelHong Kong standards on international standards.

14. We further strengthened this policy in 1999 by introducinga harmonisation programme that saw Hong Kongaccounting and auditing standards very close to fullyaligned with the full set of International Standards onAuditing (ISAs) issued by IFAC, and the InternationalAccounting Standards (IAS) issued by the InternationalAccounting Standards Board (IASB).

15. We have provided in Appendix 1 a comparison table,which shows that our standards are almost in tandemwith the international standards.

16. Having achieved harmonisation with the existinginternational standards and looking ahead, we haverecently put in place a new, open and transparent dueprocess to ensure the timely adoption of new and revisedIASs, ISAs and the IFAC Ethics Code into our HongKong Standards.

17. We expect that by end 2002, we will achieve full processconvergence with the international standard settingbodies, which means that by then we will be settingsame standards simultaneously as these bodies.

18. We also provide in Appendix 2 the composition of ourFinancial Accounting Standards Committee (FASC) andAuditing Standards Committee (AuSC), which showsthat both Standard-setting Committees are widelyrepresentative.

19. We have indicated our support for the recommendationsset out in the Standing Committee on Company LawReform’s Consultation Report regarding the compositionof the FASC and AuSC. We would like to confirm thatthe recommendations will be implemented in the 2002-2003 term of the Council, to coincide with our standardsand process convergence plan with the InternationalStandards by the end of 2002.

20. The international standards (IAS, ISA and IFAC EthicsCode) on which Hong Kong standards are based followa framework/principle-based approach as opposed to therule-based approach adopted in the US.

21. The framework approach, which puts substance overform, is regarded as more effective as a safeguard againstabuse. The kind of off-balance sheet finance arrangementsthrough special purpose entities (SPE) permitted underUS Generally Accepted Accounting Principles (USGAAP) would not have been permitted under IAS, norunder Hong Kong Accounting Standards (SSAP 32),which have fully adopted the IAS “control” concept forgroup consolidation and in particular the accounting forSPE in group accounts.

22. Sir David Tweedie, the IASB Chairman, in his recentspeech to the US Congress, explained why the IASB haschosen a principle-based as opposed to rule-basedapproach to standard-setting. He also commented inrelation to USGAAP that it tends, on the whole, to bemore specific in its requirements and include much moredetailed implementation guidance, and in his view, thisapproach is a product of the environment in which U.S.standards are set.

“The IASB has concluded that a body of detailed guidance(sometimes referred to as bright lines) encourages arule-book mentality of “where does it say I can’t dothis?” We take the view that this is counter-productiveand helps those who are intent on finding ways aroundstandards more than it helps those seeking to applystandards in a way that gives useful information. Putsimply, adding the detailed guidance may obscure, ratherthan highlight, the underlying principle. The emphasistends to be on compliance with the letter of the rulerather than on the spirit of the accounting standard.”

23. No standard can claim to be flawless, they are by naturecontinuously evolving. However, we should let you knowthat we have a sound standard-setting regime to keep usin line with international benchmarks. The wide andbalanced representations of the FASC and AuSC,together with the Council’s determination to model ourstandards based on international standards, have ensuredthat the standard-setting process in Hong Kong isindependent and much less vulnerable to business andpolitical lobbying.

24. HKSA has a long-standing record of willingly drivingthe process of improving quality and integrity on ourown initiative. We will continue to review and refineour approach where necessary.

The Auditors’ Role and Audit Independence25. We would like to move on next to the subject of the

audit scope and audit independence.

26. We should first explain some facts about the role ofaudit as it seems always misunderstood.

Role of Audit(i) Auditors are appointed by shareholders of a company

to audit and report to the shareholders on the accounts


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prepared by the directors laid before the company ingeneral meeting.

(ii) The auditors’ job is to report on whether the accountsfor a year that has already ended, show a true andfair view in compliance with accounting standards.They are not responsible for preparing the company’saccounts or managing the company.

(iii) The management are responsible for running thecompany’s business, preparing financial statements,ensuring that adequate systems of control are in placeand keeping shareholders and the market informedof important events.

(iv) Auditors are required to be independent of thecompany and management and they must follow arigorous code of Auditing and Ethical standards toensure quality of their work. Those who fail toobserve the standards in Hong Kong are subject todisciplinary action by HKSA.

(v) The auditors can provide a “reasonable assurance”on the annual accounts. They cannot, and will not,guarantee the financial health of the company.

(vi) It has been accepted by the court that the auditor isa watchdog not a bloodhound. The law requires himto form an opinion on the view given in the accounts.On the other hand, auditing standards (benchmarkedwith ISAs) provide the framework based upon whichthe auditors should check the accounting records anddocuments presented to him by the management andreach his audit opinion. He is required to exercisereasonable skepticism when reviewing the transactionpresented to him by management, but he is notexpected to perform an investigation into theauthenticity of those transactions.

(vii)If the management are perpetrating a calculated fraudor conspiring to hide information from auditors, theauditors will not always be able to find this out.

(viii)Unfortunately, senior management fraud or badbusiness decisions have been a prevalent factor inthe history of major business collapses.

(ix) Often, the question of whether the auditors should domore is a question of the balancing cost and benefit.

(x) Fraud discovery is a much more in-depth and costlyprocess.

Audit Independence27. “Audit Independence” has become the focus of much

attention worldwide in recent weeks, following the Enroncollapse. With the spotlight firmly on the question ofthe perceived independence of audit firms which providenon-audit services for their audit clients, it would perhaps

be a good starting point to comment by clarifying theHong Kong position on this issue.

28. We would state categorically that professionalindependence is a concept fundamental to theaccountancy profession. We take pride in our reputationfor excellence and integrity in this regard. The HKSAhas a clear set of ethical standards for members to follow,which include guidance on independence, objectivity andintegrity, practice promotion, fees, clients’ monies,confidentiality, etc, and we have an effective enforcementregime to safeguard our members’ adherence to theseprinciples.

29. Our ethics standards on Independence, based on the UKprinciples, are continually being updated to align withinternational developments.

30. An updated International Code of Ethics for ProfessionalAccountants featuring new rules on independence hasrecently been released. This is the result of internationalconsultation by IFAC over the last three years in theform of a Discussion Draft issued in August 1999; anExposure Draft issued in June 2000; and a Re-ExposureDraft issued in April 2001.

31. The International Code is intended to serve as a modelon which to base national ethical guidance for accountantsworldwide.

32. HKSA has decided to adopt the Code as soon as it isfinalised and had therefore taken part in the review ofthe Draft Code throughout the consultation process.

33. Following the finalisation of the Code in December 2001,the HKSA Ethics Committee has started work to adoptthe IFAC Code of Ethics as a model on which to baseour ethical guidance for professional accountants in HongKong.

34. Our current standard as well as the IFAC Code hasfollowed a substance over form, principle-based,approach, and is not designed in such a way as to imposea ban on certain services, but rather to provide guidanceon specific circumstances and relationships that pose athreat to independence and safeguards to mitigatethreats.

35. A ban is imposed by reference to the principle underthe Code that no safeguard could reduce the threat toindependence to an acceptable level. Our currentstandard recognises the possible threat to independencecreated by the quantum of fees, and imposes a benchmarkthat fees from any one client should not exceed 15% ofthe total fee income of the firm. It also deals in depthwith other issues of potential threats, such as:

• personal relationships (no member should personallybe involved in an audit if he or she has worked with


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the client company during the previous two years);

• financial involvement (insurance, pension productsand units in a mutual fund which holds shares in aclient company are permitted, but other direct andindirect beneficial interests should not be held byany staff member involved in auditing the company);and

• on the provision of non-audit services such asmanagement consulting, the standard requires firmsto take care not to perform management functions.

These requirements are consistent with the existing andupdated IFAC Code.

36. The updated IFAC Code also identifies a number ofexamples where it is considered that there is no adequatesafeguard to reduce threats to an acceptable level andmembers should not perform such work for their auditclients under normal circumstances. These includespecific types of legal, corporate finance and valuationservices, and accounting records and financial statementpreparation for listed audit clients.

37. The above examples are given under the conceptualframework that an auditor should be free in eachprofessional assignment he undertakes of any interestwhich might detract from objectivity. This requirementapplies to both reporting and other professional work.The IFAC Code sets out factors that pose a threat toindependence and firms are required to identify andevaluate these threats for every non-audit assignmentand put in place proper safeguards to preserve theirindependence.

38. While we agree that the provision of non-audit servicesto an audit client may pose a real or perceived threat toindependence, we do not believe that a rule-basedapproach to impose a ban on some or all such serviceswill serve the good or interest of either the public orthe profession. Again, quoting Sir David Tweedie’swords, the rule-based approach is “counter-productiveand helps those who are intent on finding ways aroundstandards more than it helps those seeking to applystandards”.

39. Recent talk about separation of audit and consultancy issomewhat misguided. One has to determine first of allwhat is meant by “consulting”. But where does one drawthe line?

40. Many services provided to an audit client may beconstrued as advice or consulting, but they are so closelylinked to the audit that as a practical matter only theauditor can provide them.

41. For example, during the audit process, the managementtypically request and receive significant input regarding

such matters as accounting principles and financialstatement disclosure, the appropriateness of controls andthe methods used in determining the stated amount ofassets and liabilities. Technical assistance of this natureand advice on accounting principles for audit clientsare a necessary means to promote the fair presentationof the financial statements. Banning such services wouldjeopardise and in fact hinder an efficient and costeffective audit.

42. We would say that should it be decided that auditorsshould cease to provide such services to their auditclients, this will significantly reduce rather than enhancethe standard of corporate financial reporting. Forargument sake, if all consultancies are banned on theauditors, the audit could evolve to such an extent thatdespite having identified audit adjustments, the auditorscould not communicate them to the management butcan only revert to qualifying the accounts.

43. The use of the word ‘independence’ on its own maycreate misunderstanding. Standing alone, the word maylead observers to suppose that a person exercisingprofessional judgment ought to be free from alleconomic, financial and other relationships with others.This is impossible, as every member of society hasrelationships with others.

44. What we require our members to do under the IFAC“conceptual framework” is to exercise professionaljudgment and objectivity with regard to the publicinterest, which include, an obligation to identify andevaluate circumstances and relationships that createthreats to independence, and to take appropriate actionand safeguards to eliminate or reduce them to anacceptable level.

45. These safeguards include:• Policies and procedures to prohibit professional staff

from making management decisions for the assuranceclient, or assuming responsibility for such decisions.

• Discussing independence issues related to theprovision of non-assurance services with thosecharged with governance, such as the auditcommittee.

• Disclosing to those charged with governance, suchas the audit committee, the nature and extent of allfees charged.

• Policies within the assurance client regarding theoversight responsibility for provision of non-assuranceservices by the firm.

• Involving an additional professional accountant toadvise on the potential impact of the non-assuranceengagement on the independence of the member ofthe assurance team and the firm.


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• Involving an additional professional accountantoutside of the firm to provide assurance on a discreteaspect of the assurance engagement.

• Making arrangements so that personnel providingnon-assurance services do not participate in theassurance engagement.

• Managing the professional work in such a manner soas to avoid the interest of one client adverselyaffecting those of the other.

46. When the safeguards are insufficient to eliminate thethreats to independence or to reduce them to anacceptable level, the firm is expected to decline thework or withdraw from the assurance engagement.

47. It is stated at the outset of the IFAC Code that “… Aconceptual framework that requires firms and membersof assurance teams to identify, evaluate and addressthreats to independence, rather than merely comply witha set of specific rules which may be arbitrary, is . . . .. . . , in the public interest. (Para. 8.10).

48. IFAC’s leadership is confident that the updated Codewill contribute to increased public confidence in theassurance services provided by the world’s accountants.“Such high quality standards are the fundamentalunderpinnings of the world’s financial markets,” statesAki Fujinuma, president of IFAC.

49. We agreed and intend to put the Code in place in HongKong as soon as possible. We believe that as long as ourmembers adhere to the laid down principles as definedin our ethics standards, non-audit work will notcompromise independence.

50. The Code which is 120 pages long may be downloadedfrom IFAC’s web site at www.ifac.org.

51. We would point out that the controversial independenceissues that have arisen in the US are generally attributedto the dramatic growth in the size of some audit firms’consulting businesses relative to audit, and the widespreadprovision of management consulting services to auditclients. By contrast, audit and other traditionalprofessional services, such as tax advisory, are still themainstream services provided by accountants in HongKong.

Regulatory Framework52. The Society has the authority and machinery to set

accounting auditing and ethics standards and to disciplinethose members of the profession who fail to observesuch standards, irrespective of whether they work asauditors or preparers of financial statements (CFO/directors etc.). This self-regulatory framework iscomplemented by the Society’s control of entrance intopublic practice through professional examinations and

practical experience requirements, and by its structuredprogramme of continuing professional education throughseminars, courses and reading materials.

53. The HKSA started its own initiatives and in its FourthLong Range which was published in year 2000, it decided,amongst other things, to conduct an overall review ofthe Society’s self-regulatory system including a reviewof both its disciplinary process and practice reviewprocess. The HKSA’s policy direction is very clear:

• Greater openness and transparency

We published a white paper on improving disciplinaryhearing proceedings back in September 2000 with aview to making our disciplinary hearing process moreopen and transparent. With membership andcommunity support, we will make our hearings publicand increase lay members on disciplinarycommittees.

• Involvement of lay members

While there will be a continued need for thosefamiliar with financial reporting and audit work toparticipate in our practice review, investigatory anddisciplinary committee work, we also recognise theimportance and contributions of lay members to theenforcement process. We will invite, for example,the Hong Kong Law Society and the Hong Kong BarAssociation to nominate their experienced membersto serve on our disciplinary panel.

• Independence of the regulatory proces

Under the current legislation, the Society’s Councilcannot influence the work of the statutory committees(Investigation Committee and DisciplinaryCommittee). There is no cross membership betweenCouncil members and members of these committeesand we observe strictly the conflict of interest issuesduring deliberations.

54. The Society has demonstrated its ability to self-regulatethrough its system of practice review, which it hasoperated since September 1992 and professional standardsmonitoring since the 1980’s. We have since completeda total of 1,013 practice review cases. Under this system,the Society reviews and monitors the quality controlprocedures and compliance of all audit practices withethical, auditing and accounting standards. The reviewsprovide assurances that a high standard of independentprofessional work is maintained. The system of practicereview is currently under review with the objective toidentify areas where it can be further improved toenhance effectiveness.

55. In addition to its own regulatory work, HKSA worksclosely with other regulators including the SFC and


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HKEx with the common goal to maintain an effectiveand efficient corporate governance regime in Hong Kong.

Corporate Governance Practices56. Since the formation of our Corporate Governance

Working Group (later renamed Corporate GovernanceCommittee) in 1994, the Society has undertaken numerousstudies and produced a series of study reports andpractice guidance to promote good corporate governancepractices in Hong Kong.

57. In our First Report, published in 1995, we made 19recommendations for improved corporate governancestandards and practices. When we recently took stockof t he ex t en t o f impl emen ta t ion o f t heserecommendations, we were pleased to find that many ofthem have since been formally adopted by the StockExchange in the form of additional Listing Rules or byinclusion in the Stock Exchange’s Code of Best Practice.

58. There are, however, a number of other items, whichremain to be implemented.

59. A number of these will have a significant enhancementeffect in relation to some of the issues to which we haveoutlined in this paper. We would therefore like to drawyour attention to these in the hope that we will be ableto enlist your assistance in promoting their early adoptionin Hong Kong:-

I. Mandatory appointment of a CFO (who should be aqualified accountant) at board level:

• with designated responsibility for the financefunction;

• who should be a signatory to the financialstatements on behalf of the board; and

• have the right of access to the Audit Committee.

60. The growing complexity of financial reporting, corporatefinancial arrangements and activities, and thedevelopment of highly technical financial instrumentssuggest that it would be appropriate to appoint a qualifiedaccountant as chief financial officer in each regulatedand listed corporation. The Society’s membership wouldbe one suitable qualification.

61. We believe the appointment of a qualified accountantwith special responsibility for the financial statementswould provide a better assurance of the quality ofaccounting information and its compliance with generallyaccepted accounting principles. In this way, where thepreparer of the accounts is a member of HKSA, he wouldbe subject to the regulation of the Society to maintainhigh professional standards and would be directlyaccountable to the Society for his professional conduct.This would give added protection to minorityshareholders and so be in the public interest.

62. This requirement has been incorporated in the Rules ofthe Growth Enterprise Market (GEM), but has not sofar been introduced into the Main Board.

II. Disclosure of fees paid to auditors in respect of othernon-audit services

63. Such disclosure would increase the transparency of theauditors’ independence, and we see great benefits in itsearly adoption by companies. However, while thispractice has the profession’s endorsement, responsibilityfor implementation of it would remain with thecompanies and the regulators. We would of courseencourage voluntary disclosure by the companiesconcerned before such disclosure becomes a mandatoryrequirement.

III. Effectiveness of Audit Committee

64. We published a practice code on audit committees in1997 and an updated edition has just been released inFebruary 2002. The code set out detailed guidanceregarding the responsibilities of the audit committee,independence and quality of its membership, meeting &reporting functions, etc. The code has been developedto benchmark good practices and has been referred to inthe Stock Exchange’s Code of Best Practice. While ithas no mandatory force, we actively promote andencourage its voluntary adoption by companies. Webelieve that if companies follow the principles laid downin the code, they will be more likely to have an effectiveaudit committee.

65. We should also like to point out that one of the functionsthat we have prescribed in our practice code for theaudit committee is to assess the quality of the serviceand the reasonableness of the fees charged by theauditors. The audit committee should keep under reviewthe nature and extent of non-audit services provided bythe auditors, to strike a balance between ensuring theauditors’ objectivity and cost-effectiveness and efficiencyto the company for engaging them to do the work (seealso paras. 44 above).

IV. Disclosure of meeting and attendance record

66. To contribute to the transparency of the company as tohow it runs its business:-

(i) Disclosure of the number of meetings held duringthe year of the board, audit committee andremuneration committee.

(ii) Disclosure of the attendance records of individualdirectors in relation to meetings of the board, auditcommittee and remuneration committee.

Financial Reporting Models – Looking to the Future67. There is a common complaint that the relative absence


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of up-to-date information with which to assess corporateearning capacity, coupled with the pace of change, helpsexplain the volatility of today’s share prices. Investorsneed more frequent corporate financial and non-financialdisclosures (e.g. on-line, real-time) to make informedinvestment decisions. Recent initiatives proposed by theStock Exchange will address these needs.

68. Looking to the future, companies would be producingthe new disclosures with the desired frequency over theinternet; auditors would be providing contemporaneousassurance that the information was reliable; investorswould benefit from better decision-making information;productive corporations would benefit from a lower costof capital; and the economy would be growing with evenmore stability and promise.

69. To realise this vision, both the reporting model and thefocus of auditing must change. Steps toward this newdirection have already begun. Companies’ accountingand reporting processes will be more automated andstandardised. Auditors in this new world will be reportingon information systems. They will be focusing heavilyon preventive controls and providing assurance that

information systems are operating effectively andsufficiently to produce reliable information.

70. Initiated by the coordinated effort of the worldaccounting profession, new reporting technology (suchas XBRL) and assurance models (WebTrust, SysTrust,DataTrust) are emerging that will facilitate continuousreporting and auditing to meet the needs of theknowledge economy. HKSA is cognisant of the need ofthe accounting profession in Hong Kong to keep anopen mind to new developments elsewhere in the worldand is playing an active part in these new and excitingdevelopments.

Closing Remarks71. In closing, we hope that we have explained our position

and contributions towards the issues under discussion inthis meeting. The Society supports any initiatives toimprove Hong Kong’s financial reporting standards andassurance services. We will work closely with LegCo,the Government and other regulators to create a businessenvironment that will benefit local and overseas investorsto maintain Hong Kong’s status as an internationalfinancial centre of the world.

Appendix 1AUpdate on Hong Kong Statements of Standard Accounting Practice (HKSSAPs)

vsInternational Accounting Standards (IASs)

IAS No. Name of Statement SSAP No. Up-to-date Targetedcompletion date

IAS 1 Presentation of Financial Statements SSAP 1

IAS 2 Inventories SSAP 22

IASs 3-6 Withdrawn N/A

IAS 7 Cash Flow Statements SSAP 15

IAS 8 Net Profit or Loss for the Period, FundamentalErrors and Changes in Accounting Policies. SSAP 2

IAS 9 Research and Development Costs(superseded by IAS 38) SSAP 16

IAS 10 Events After the Balance Sheet Date SSAP 9

IAS 11 Construction Contracts SSAP 23

IAS 12 Income Taxes Exposure draft 30 April 2002

IAS 13 Withdrawn N/A

IAS 14 Segment Reporting SSAP 26

IAS 15 Information Reflecting the Effects of Changing Prices On hold

IAS 16 Property, Plant and Equipment SSAP 17

IAS 17 Leases SSAP 14

IAS 18 Revenue SSAP 18

IAS 19 Employee Benefits SSAP 34

IAS 20 Accounting for Government Grants and Disclosure ofGovernment Assistance SSAP 35

IAS 21 The Effects of Changes in Foreign Exchange Rates On hold *


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IAS 22 Business Combinations SSAP 30

IAS 23 Borrowing Costs SSAP 19

IAS 24 Related Party Disclosures SSAP 20

IAS 25 Accounting for Investments (Superseded by IAS 39 andIAS 40) SSAP 13 and 24

IAS 26 Accounting and Reporting by Retirement Benefit Plans 2.302 “Financialstatements ofretirementschemes”

IAS 27 Consolidated Financial Statements and Accounting forInvestments in Subsidiaries SSAP 32

IAS 28 Investments in Associates SSAP 10

IAS 29 Financial Reporting in Hyperinflationary Economies On hold

IAS 30 Disclosures in the Financial Statements of Banks and HKMA BestSimilar Financial Institutions Practice Guide

IAS 31 Financial Reporting of Interests in Joint Ventures SSAP 21

IAS 32 Financial Instruments: Disclosure and Presentation Exposure Draft

IAS 33 Earnings Per Share SSAP 5

IAS 34 Interim Financial Reporting SSAP 25

IAS 35 Discontinuing Operations SSAP 33

IAS 36 Impairment of Assets SSAP 31

IAS 37 Provisions, Contingent Liabilities and Contingent Assets SSAP 28

IAS 38 Intangible Assets SSAP 29

IAS 39 Financial Instruments: Recognition and Measurement Exposure Draft

IAS 40 Investment Property In discussion

IAS 41 Agriculture Exposure Draft Sept 2002(As at 12 March 2002)

Appendix 1BUpdate on Hong Kong Statements of Auditing Standards (HKSASs)/

Hong Kong Standards on Assurance Engagements (HKSAEs)vs

International Standards on Auditing (ISAs)

Title Title Remarks

— Preface to ISAs and related services HKSAS 010 The scope and authority ofauditing pronouncements

ISA 120 Framework of ISAs

ISA 100 Assurance engagements HKSAE 100 Framework for assurance engagementsintended to provide either a high ormoderate level of assurance

HKSAE 200 High level assurance engagements

ISA 200 Objective and general principles HKSAS 100 Objective and general principlesgoverning an audit of financial statements governing an audit of financial

statements

ISA 210 Terms of audit engagements HKSAS 140 Engagement letters

ISA 220 Quality control for audit work HKSAS 240 Quality control for audit work

ISA 230 Documentation HKSAS 230 Documentation

ISA 240 The auditor’s responsibility to consider HKSAS 110 The auditors’ responsibility to considerfraud and error in an audit of financial fraud and error in an audit of financialstatements statements

ISA 250 Consideration of laws and regulations in HKSAS 120 Consideration of laws and regulationsan audit of financial statements in an audit of financial statements


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ISA 260 Communications of audit matters with HKSAS 610 Communications of audit matters ofthose charged with governance governance interest with directors or

management

ISA 300 Planning HKSAS 200 Planning

ISA 310 Knowledge of the business HKSAS 210 Knowledge of the business

ISA 320 Audit materiality HKSAS 220 Audit materiality

ISA 400 Risk assessments and internal control HKSAS 300 Audit risk assessments and accountingand internal control systems

ISA 401 Auditing in a computer information HKSAS 310 Auditing in a computer informationsystems environment systems environment

ISA 402 Audit considerations relating to entities HKSAS 480 Audit considerations relating to entitiesusing service organisations using service organisations

ISA 500 Audit evidence HKSAS 400 Audit evidence

ISA 501 Audit evidence - additional considerations HKSAS 401 Audit evidence - considerations forfor specific items specific items

ISA 505 External confirmations HKSAS 402 External confirmations

ISA 510 Initial engagements – opening balances HKSAS 450 Opening balances and comparatives

ISA 520 Analytical procedures HKSAS 410 Analytical procedures

ISA 530 Audit sampling and other selective HKSAS 430 Audit samplingtesting procedures

ISA 540 Audit of accounting estimates HKSAS 420 Audit of accounting estimates

ISA 550 Related parties HKSAS 460 Related parties

ISA 560 Subsequent events HKSAS 150 Subsequent events

ISA 570 Going concern HKSAS 130 Going concern

ISA 580 Management representations HKSAS 440 Representations by management

ISA 600 Using the work of another auditor HKSAS 510 Principal auditors and other auditors

ISA 610 Considering the work of internal auditing HKSAS 500 Considering the work of internal auditing

ISA 620 Using the work of an expert HKSAS 520 Using the work of an expert

ISA 700 The auditor’s report on financial statements HKSAS 600 Auditors’ report on financial statements

ISA 710 Comparatives HKSAS 450 Opening balances and comparatives

ISA 720 Other information in documents HKSAS 160 Other information in documentscontaining audited financial statements containing audited financial statements

ISA 800 The auditor’s report on special purpose On hold.audit engagements

ISA 810 The examination of prospective In discussion.financial information The Hong

Kongequivalent isAuditingGuideline 3.341“Accountants’report onprofitforecasts”.

ISA 910 Engagement to review financial statements HKSAS 700 Engagements to review interimfinancial reports

ISA 920 Engagements to perform agreed-upon HKSAS 710 Engagements to perform agreed-uponprocedures regarding financial information procedures regarding financial

information

ISA 930 Engagements to compile financial HKSAS 720 Engagements to compile financialinformation information

HKSAS 470 Overall review of financial statements No equivalentISA.

(As at 12 March 2002)


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1. Mr. BEST Roger Thomas (Chairman) Deloitte Touche Tohmatsu A

2. Mr. WILKINSON John Bernard (Deputy Chairman) - X

3. Mr. WINKELMANN Paul Franz (Deputy Chairman) PricewaterhouseCoopers A

4. Mr. CHAN Wing Nang, Billy Billy Chan & Co. A

5. Ms. CHEUNG Sau Ying, Olivia Hong Kong Exchanges & Clearing Ltd. R

6. Mr. FUNG Hon Kwong,Tommy Arthur Andersen & Co. A

7. Mr. GRIEVE Charles Ramsay Securities & Futures Commission R

8. Mr. HILLIARD Philip Mckenzie Craigie Limited I

9. Ms. PATTLE Sheila Helen KPMG A

10. Mr. RAPER Christopher William Swire Pacific Limited P

11. Mr. REID Nigel James Hamilton Ernst & Young A

12. Mr. TAYLOR Stephen Deloitte Touche Tohmatsu A

13. Prof. TSUI Judy City University of Hong Kong W

14. Mr. WILLIAMSON Andrew Gordon Hongkong and Shanghai Banking Corp. U/P

15. A nominee of the Hong Kong Institute of Directors - Awaiting IOD confirmation B/P

Appendix 2AHKSA – Financial Accounting Standards Committee Composition for 2002

Key to representation :A: Accountants in public practiceU: Users of financial statementsP: Preparers of financial statementsB: Business communityR: Regulators of the securities and banking industriesW: AcademiaI: Investment communityX: Private user in public community

Appendix 2BHKSA – Auditing Standards Committee Composition for 2002

1. Mr. SUN Tak Kei, David (Chairman) Ernst & Young A

2. Mr. CHOW Chan Lum, Charles (Deputy Chairman) Wong Brothers & Co. A

3. Mr. LIU Kennedy (Deputy Chairman) Arthur Andersen & Co. A

4. Mr. BENNETT Andrew Ernst & Young A

5. Mr. CHENG Patrick South China Capital Ltd. U

6. Mr. GEORGE Richard John Weir Deloitte Touche Tohmatsu A

7. Ms. LI Yin Fan, Fanny BDO International A

8. Mr. SHUM Man To Government of HKSAR, Treasury G

9. Mr. TAI Hay Yuen Tai, Kong & Company A

10. Mrs. WA LIANG Hsien Shau, Jeanette City University of Hong Kong W

11. Mr. WINKELMANN Paul Franz PricewaterhouseCoopers A

12. Ms. WONG Sau Ling, Shirley KPMG A

13. Mr. YUEN Kwok Keung, Desmond Grant Thornton A

14. A nominee of the Hong Kong Monetary Authority – Awaiting HKMA confirmation R

15. Vacant (A banker) B

Key to representation :A: Accountants in public practiceB: Banking industryG: GovernmentU: Users of financial statementsR: Regulators of the securities, banking and insurance industriesW: Academia


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The following is a synopsis of the points made by theSecretary for Financial Services, Mr Stephen Ip, at theLegislative Council Panel on Financial Affairs meetingon 14 March 2002:

Good corporate governance is the key to improvingeconomic efficiency, enhancing the attraction of our marketand investors’ confidence, as well as maintaining the stabilityof our financial system. Enhancing Hong Kong’s corporategovernance regime is a priority of our work. We have allalong attached much importance to, and dedicatedconsiderable efforts in, reforming our legislation and rulesto keep them up to date.

Good progress has been made by the Administration, theStanding Committee on Company Law Reform (SCCLR),the Securities and Futures Commission (SFC), the HongKong Exchanges and Clearing Limited (HKEx) andprofessional bodies concerned in carrying out this prioritytask in the past two years. Our hard work has been wellrecognised. The Managing Director of the InternationalMonetary Fund said last year that Hong Kong was the standardsetter for corporate governance and transparency in Asia.According to Standard and Poor’s Corporate GovernanceStudy on Hong Kong published in January this year, HongKong is a leader in the domain of corporate governance inAsia.

Protection of Shareholders’ RightsIn the context of protection of shareholders’ rights, progresshas been achieved in the following areas:

• In its Consultation Document published in July last year,the SCCLR proposed a number of amendments to enhanceshareholders’ rights. These include amending the lawto provide shareholders with a more meaningfulprocedure by which to nominate and elect directors;introducing statutory derivative action, whereby the SFCwill be empowered to bring derivative actions againstwrongdoers in relation to listed companies, subject tothe proviso that the SFC shall exercise its power in thepublic interest as well as in the interest of the company.The public comments received indicated support for theproposals. We are taking forward such proposals andproceeding to amend the law.

• Measures to protect shareholders are also contained inthe Securities and Futures Ordinance enacted by theLegislative Council yesterday. These include providingexpressly for a private cause of action for a person toseek compensation for pecuniary losses suffered as aresult of relying on any public communication relatingto securities or futures contracts, which is false ormisleading. Such compensation may be sought from theperson responsible for disseminating the information,e.g. directors or senior officers of a company. Theintention is to ensure that persons responsible for issuing

public communications, such as listed companies, shouldexercise due care and diligence in doing so, so as toensure the accuracy of the information released.

• The new Ordinance also creates an express private rightof civil action for a person to sue another person forrecovery of pecuniary losses resulting from the latter’smarket misconduct, such as insider dealing and stockmarket manipulation. This allows the court hearing onsuch a private action to admit findings of the MarketMisconduct Tribunal and criminal convictions asevidence. This would help investors to establish theirclaims, without having to prove afresh the existence ofmarket misconduct.

• Tighter voting mechanism for connected transactionsby interested shareholders; stricter rules against thedilution of shareholders’ interests through placing ofshares, rights issues and share repurchases are proposedby the HKEx in its Consultation Document on changesto the Listing Rules. These proposals are along a similarvein of those made by the SCCLR. I welcome members’comments on such proposals.

Enhance Transparency and Measures to CombatMarket MisconductIn relation to enhancing transparency:

• The Securities and Futures Ordinance mentioned abovehas put in place a disclosure regime that is in line withinternational standards. The initial disclosure thresholdfor substantial shareholders has now been lowered from10% to 5%, and the notification period has beenshortened from five to three business days.

• The provisions in the Securities and Futures Ordinancehave also enhanced the investigatory powers of SFC,including the power to seek assistance from a listedcompany’s bank, auditor or business counterpart so asto verify information obtained from an investigation.This facilitates the SFC to investigate into marketmisconduct behaviour that would undermine the interestof shareholders of listed companies. The imminentestablishment of the Market Misconduct Tribunal andthe expansion of the route for criminal action underthe Ordinance would strengthen the civil and criminalmeasures available to combat market misconductbehaviour. These measures help to deter manipulationof market and stock prices, as well as the disclosureof false or misleading information for inducingtransactions.

• Timely disclosure of quality information by listedcompany is important. In this connection, the HKEx’sConsultation Paper suggests listed companies to publishquarterly reports within 45 days after the quarter-end.Issuers will be required to publish their half year results

Secretary for Financial Services’ Address on Corporate Governance


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announcements within two months of the relevantfinancial period. Again, I welcome members’ views onsuch disclosure proposals.

Promoting Good Directors and Board PracticesEstablishing good director and board practices would beconducive to ensuring that directors and their boards actresponsibly in the governance of their companies and beaccountable to shareholders for asset and resources entrustedto them:

• The Standing Committee’s Consultation Paper containsproposals in relation to directors’ duties. Furthermore,the Standing Committee has proceeded with the secondphase of its corporate governance review, and is draftinga non-statutory statement on the duties of directors forpublic reference. The Standing Committee will alsoexamine the development of training programmes fordirectors.

• The HKEx will issue further guidance on theindependent role of the Independent Non-ExecutiveDirectors (INEDs). The Listing Rules consultationdocument proposes that at least one of the INEDs willbe required to have appropriate professionalqualifications and issuers will be required to appointINEDs representing not less than one-third of themembers of their boards or not less than 2 in any event.The HKEx also recommends that the roles of Chairmanand Chief Executive Officers should be segregated asa good practice. Issuers will have to disclose the natureof audit work they engaged, amount of audit and non-audit fees as well as directors’ remuneration. Stricterrules on disclosure of securities transactions bydirectors are also proposed. In addition, the HKExproposes making the establishment of Audit Committeesa mandatory requirement, and the establishment ofNomination and Remuneration Committees goodpractice.

An important aspect of corporate governance is toenhance the transparency of company operations. Effectivecorporate governance means the disclosure of informationthat is truthful and timely in reflecting the operations andfinancial position of the corporation concerned. Suchinformation should also meet the needs of the users (especiallyinvestors). It is important to bear in mind that the quality ofour accounting and auditing standards and practitioners inthe accounting profession has a direct bearing on the qualityof the information disclosed.

The Hong Kong Society of Accountants is the self-regulatory body for the accounting profession. It promulgatesthe accounting and auditing standards in Hong Kong(Statement of Standard Accounting Practices and Statementof Auditing Standards). The President of the Society wouldexplain their work later on. The present system has operatedwell but there are of course areas for improvement. For

example, the SCCLR in its Consultation Paper publishedlast year recommends widening the composition of therelevant accounting and auditing standards settingcommittees to cater for greater public involvement in theprocess. We support such recommendations. Furthermore,the SCCLR also recommends establishing a body withauthority to investigate financial statements. We arepositively examining this proposal.

In relation to accounting and auditing standards, apartfrom very rare circumstances, Hong Kong’s standards arein line with the International Accounting Standards. ThePresident of the Society would explain the details. In factthe Financial Times carried an article on 26 February 2002,stating that the US accounting standards compareunfavourably with those in Hong Kong in certain areas. Forexample, the Hong Kong accounting standards do not permitthe use of special purpose entities.

The Securities and Futures Ordinance provides auditorsof listed companies who report to the SFC any suspectedfraud or misconduct in the management of a listed companywith statutory immunity from civil liability under thecommon law. This would encourage auditors working underthe rule of professional ethics to discharge their civic dutyto report possible fraud or irregularities to the SFC whenconducting an audit of a listed company. This helps to protectthe interest of the investing public.

The measures mentioned above are part and partial ofan on-going task to solidify our corporate governance regime.The initiatives were launched by the various agencies andprofessional bodies well before Enron. The public is beingconsulted in this evolving process.

Obviously, we cannot rely on legislation alone to enhancecorporate governance standards. In fact, the Enron caseindicated that such incidents happen even in the States,notwithstanding her stringent legislation and advancedregulatory regime. This illustrates that besides making andenforcing legislation, corporate culture is equally important.By corporate culture, I mean whether companies complywith both the spirit and provisions of the law, whether theyrecognise the direct impact of corporate governance on thevalue of their shares, whether they acknowledge theirresponsibilities to shareholders, employees and creditors,as well as to the general public as a whole. In this regard,in implementing the provisions of law in Hong Kong, wewould continue to work closely with the SFC, the HKExand other professional bodies to instil a good corporateculture amongst companies through public education andpublicity campaigns.

Corporate governance is not a sector specific issue. Itstraddles different sectors and is a subject that shouldconcern directors and senior management of companies,shareholders, regulators and professionals alike. Improvingour corporate governance regime is a continuous task, which


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requires the concerted action and support of all partiesconcerned. We will work with all relevant parties towardsthis common goal.

Finally, the rule of law and the independence of judiciaryare crucial elements in a successful corporate governanceregime. Even with stringent legislation, a water-tightregulatory regime and the professionalism of the

practitioners, we can only deter but cannot eliminate fraudcompletely. In this respect, we rely on Hong Kong’s effectivelaw enforcement agencies, our mature legal system and theindependent judges who apply the law without fear or favourto punish those who break the law.

The full text of the presentation statement can be viewedat http://www.legco.gov.hk/english/index.htm

SCCLR Chairman’s Address on Corporate GovernanceThe following is a synopsis of the points made by theStanding Committee on Company Law Reform (SCCLR)Chairman, Mr Anthony Rogers, at the LegislativeCouncil Panel on Financial Affairs meeting held on 14March 2002.

The views expressed in this note are personal views.Whilst it is intended that they should reflect the views andlikely conclusions and recommendations of the Committee,because its work on corporate governance is by no meansfinished, the Committee’s conclusions and recommendationsare yet to be formulated. This note does not aim to providea comprehensive review of all aspects at present beingconsidered by the Committee but can only highlight a fewof the matters and issues.

Background to Committee’s Work on CorporateGovernance

On completion of the overall review of the CompaniesOrdinance, the Committee was asked to consider corporategovernance. In order to do this, three subcommittees wereformed with a view to considering matters relating toshareholders, directors and corporate reporting.

Last summer, July 2001, the Committee issued aconsultation document setting out various proposals. In themain, these matters were items arising from the review ofthe Companies Ordinance. Matters relating to corporatereporting came, primarily, from proposals from theaccountancy profession. Appendix B to the paper CB(1)1184/01-02(04) reflects the proposals which were put forward inthe consultation paper last July. Those proposals have nowto be viewed in the light of the responses to the consultationdocument and further consideration given to the matters bythe Committee.

The response to the consultation document has shownthat the business community is very wary of over regulationof private companies. As one example, the consultationdocument had proposed that private companies should filetheir annual accounts in the Companies Registry. Thatproposal has met with almost universal disapproval. In viewof the points made in the responses, the Committee is nownot proposing to recommend to the Secretary for FinancialServices that such filing be introduced.

One major difficulty thrown up by the consultation has

been in relation to directors’ dealings with associatedcompanies. The proposals in the consultation document inrelation to this aspect did not meet with universal enthusiasm.The Committee has, however, determined that the mattershould be considered again with a view to formulatingappropriate proposals.

Commissioned Research ProjectsThe Committee has commissioned four research projects.

City University was successful in respect of three tendersand Chinese University in respect of one. These cover theareas of investors attitudes; a comparative study of corporategovernance regimes in other countries; audit, nominationand remuneration committees and finally an analysis of theextent of single family control and its effect on economicperformance of the relevant companies.

There has been some delay in the provision of the finalreports of these projects although current progress wouldindicate that the reports should be available by the end ofApril or soon thereafter.

One further research project has not been commissionedin view of the unsatisfactory tenders.

Some of the preliminary and tentative results which areemerging from these research projects include:

• Investors, in particular institutional investors, are moreconcerned about track records and past performance ofcompanies than they are about corporate governance.

• Although there may be a perception that corporategovernance matters in Hong Kong were not as wellregulated as in other jurisdictions, so far nothing specifichas been shown where Hong Kong is lagging behind.

The preliminary conclusions derived from one of theresearch projects appears to be that it is the norm for HongKong companies to be controlled by a single shareholder orfamily. Often this is done with structures of holdingcompanies, which, for want of a better expression arereferred to as a pyramid structures. It would appear thatthis would be true of more than 80% cent of the companieson the main board listing. This is higher than any otherjurisdiction. Equally interesting, however, is that the resultsof the research are likely to indicate that family controlledcompanies are at least as successful as widely held


SOCIETY NEWS

companies. Indeed, those companies that have significantdirectorships and senior management posts held by membersof the controlling family appear to be significantlysuccessful.

Nature of Hong Kong Listed CompaniesThe prevalence in Hong Kong of single family control of

listed companies is one factor which has to be taken intoaccount in formulating proposals for corporate governance.Another special feature of the Hong Kong Stock Market isthat 75 per cent of listed companies are incorporatedoverseas. This creates important attendant difficulties inthat it is sometimes difficult to introduce legislative orother controls because of the extraterritorial considerations.

Although the Stock Exchange listing rules can be used inrespect of corporate governance matters it has to be bornein mind that:

• Listing rules are primarily the province of the stockexchange which is a trading company.

• Listing rules do not have statutory backing and it mightbe difficult to give listing rules statutory backing, sincestatutory, and thus legally coercive, force would be givento rules made by a commercial organisation.

• In any event listing rules would not cover public butunlisted companies.

• Listing rules cover companies which for the most partare incorporated overseas and may have listings overseasin addition to the Hong Kong listing.

Directors’ DealingsOne of the major areas which the Committee will be

concentrating on in the next few months will be in relationto directors’ dealings with the company, subsidiaries andassociated companies. This is an area where it is likelythat abuses could more easily arise. The aim of any newrules would be to prevent unfair advantage being taken bydirectors of their position. Such unfair advantage could extendto appropriation of assets. Some of the matters that need tobe resolved in formulating proposals include:

• How the regulation is to be achieved e.g. by statute orlisting rules.

• How to formulate rules and regulations that would beeffective in terms of not being open to easy circumventionand yet not be over restrictive. In this respect the controlof transactions effected overseas is likely to be a matterof some concern.

• The scope of the transactions covered needs carefulconsideration when it is appreciated that an “associated”company is not defined in legislation and is an accountingterm. The real test is perhaps of one of quality i.e. theextent of actual control rather than an empirical test.

A suitable solution is not obvious. Nevertheless, theCommittee has resolved to try to find a solution that can beput to the Secretary for Financial Services.

The Enron caseUntil full details of the Enron case have emerged after

investigations and inquiries, no comments on it can beauthoritative, but the following preliminary observationsmight be made.

• Dealings by directors with linked and associatedcompanies appears to have been one of the problems.

• The frequency with which those involved seem to havetaken the 5th amendment would indicate that there wereplenty of rules in place but that they have been breached.

Independent and Other Non-executive DirectorsIn relation to corporate governance considerable

importance is often attached to the appointment of non-executive and in particular independent non-executivedirectors. These persons clearly play an important role inany company. However, amongst matters which should beborne in mind in relation to independent non-executivedirectors are:

• The definitions of independence and classification ofdirectors as independent in some cases would raisequestions as to whether such persons are trulyindependent.

• In view of the fact that nearly all companies listed onthe Stock Exchange in Hong Kong are single familycontrolled it can only be surmised that that controlextends to the selection of the independent directors.Indeed, the scope of action of those directors may wellbe circumscribed

• The pool of suitable persons to be independent non-executive directors, in Hong Kong, may be limitedbecause the pool of persons with experience as corporatedirectors who are available and willing to act asindependent non-executive directors may be limited.Those involved in running family controlled companiesare unlikely to retire early.

• It may be that the most that should be expected ofindependent non-executive directors for the bulk ofcompanies in Hong Kong would be the bringing ofexpertise to the company which the company does notalready have.

Future ProgressIt is expected that there may need to be a further

consultation in respect of proposals arising from theCommittee’s work. It is hoped that the Committee’sproposals on corporate governance can be put to theSecretary for Financial Services by the end of this year orsoon thereafter.

The full text of the presentation statement can be viewedat ht tp://www.legco.gov.hk/engl ish/index.htm


SOCIETY NEWS

The Hong Kong Society of Accountants (HKSA) has apolicy of converging Hong Kong Statements of StandardAccounting Practice (SSAPs) with the InternationalFinancial Reporting Standards (IFRS) issued by theInternational Accounting Standards Board (IASB).

The Society’s Standard-Setting Strategy Review TaskForce met on 4 July 2001. Key recommendations arisingfrom that meeting, approved by the HKSA Council at itsmeeting held on 31 July 2001, were that:

• The Society’s strategy in setting accounting standardsis to achieve convergence with IFRS and to adopt IFRSin Hong Kong as far as possible without any “tinkering”.

• Once an exposure draft (ED) of a proposed IFRS isissued by the IASB for comment, an identical Hong KongED should be issued simultaneously by the Society toobtain comments from members and interested partiesin Hong Kong, which will form the basis of the Society’ssubmission on the proposed IFRS.

• Upon finalisation, even if the IFRS failed to take intoaccount the comments made by the Society, Hong Kongshould still accept the international majority decisionand accept the IFRS rather than deviate from them. Inother words, we would adopt verbatim the final IFAS asa matter of policy, unless Council, by exception, shoulddecide to deviate from a particular IFRS for specificreasons. Where there was a conflict between an IFRSand the law in Hong Kong, the Society would seek lawchanges, where appropriate.

The following Statement of Due Process for settingaccounting standards in Hong Kong was approved by theHKSA Council when it met on 26 February 2002. Thedue process is concerned with putting the vision ofconvergence into practice. Primarily its provisions relateto achieving “process convergence” (that is, setting thestandards substantially in the same way and at the sametime as is done internationally) which will, as aconsequence, give rise to “product convergence”. Productconvergence encompasses having the same standards asset out in the IFRS with differences only when necessaryin rare and exceptional circumstances.

Statement of Due Process1. The Hong Kong Society of Accountants (HKSA) Financial

Accounting Standards Committee (FASC) proceduresensure that Hong Kong Statements of StandardAccounting Practice (SSAPs) are of high quality andare introduced only after giving the FASC’s constituencyopportunities to make their views known during thestandards-setting due process.

2. The FASC has a mandate to achieve convergence (as faras practicable) with the International Financial Reporting

Achieving Convergence of Hong Kong SSAPs withInternational Financial Reporting Standards

Standards (IFRS) issued by the International AccountingStandards Board (IASB). Within this remit, the HKSACouncil permits the FASC to work in whatever way itconsiders most effective and efficient and this mayinclude forming advisory sub-committees or other formsof specialist advisory groups to give advice in preparingnew and revised SSAPs.

The procedures for developing SSAPs are as follows:3. The FASC determines the scope and priority of any

projects formally added to its agenda and reviews thesewith the HKSA’s Accounting Standards Advisory Panel(ASAP).

4. The process for the development of SSAPs will involvethe following steps:• During the early stages of a project, the FASC may

establish an advisory sub-committee to give advice onthe issues arising in the project. Consultation withthe advisory sub-committee occurs when requiredthroughout the project;

• The FASC may prepare and publish discussiondocuments for public comment;

• The FASC will publish an Exposure Draft for publiccomment;

• The FASC considers all comments received and, whenappropriate, prepares a comment letter to the IASB;and

• Following publication of the finalised IFRS, the FASCconsiders the changes made (if any) by the IASB andwill recommend to the HKSA Council the approvalof a SSAP.

Additional Elements of the Due ProcessMeetings5. Meetings of the FASC, the ASAP and Sub-Committees

of the FASC (including the Urgent Issues andInterpretations Sub-Committee) are not open to publicobservation. However, as discussed further below, theconstituency is kept updated on the FASC’s deliberat-ions and correspondence from the constituency on theFASC’s technical agenda is welcomed at all times.

6. The Secretariat will publish a summary of the decisionsmade at such meetings promptly thereafter.

7. When the HKSA publishes a SSAP, it may also publisha Basis for Conclusions to explain publicly how theconclusions were reached and to give backgroundinformation that may help users of the SSAPs to applythem in practice.

Comment Periods8. The FASC issues Exposure Drafts of Proposed SSAPs,

Discussion Documents and other similar consultation


SOCIETY NEWS

documents for public comment. To facilitate the FASCproviding timely comment to the IASB, the usualcomment period is between sixty (60) and ninety (90)days. Draft Interpretations are usually exposed for acomment period of sixty (60) days.

Coordination with International Due Process9. Close co-ordination between the FASC’s and IASB’s

due processes is important to the success of both theHKSA’s and IASB’s mandates.

10. In its due process statement, the IASB states that it isexploring ways in which it can integrate its due processmore closely with national due process (such as thatoperated in Hong Kong by the FASC).

11. In particular, the IASB states that it is exploring thefollowing procedure for projects that have internationalimplications:• IASB and national standard setters would co-ordinate

their work plans so that when IASB starts a project,national standard setters would also add it to theirown work plans so that they can play a full part indeveloping an international consensus. Similarly,where national standard setters start projects, IASBwould consider whether it needs to develop a newIFRS or revise its existing IFRSs. Over a reasonableperiod, IASB and national standard setters shouldaim to review all standards where significantdifferences currently exist, giving priority to theareas where the differences are greatest;

• National standard setters would not be required tovote for IASB’s preferred solution in their nationalstandards, since each country remains free to adoptIASC standards with amendments or to adopt otherstandards. However, the existence of an internationalconsensus is clearly one factor that members ofnational standard setters would consider when theydecide how to vote on national standards;

• IASB would continue to publish its own ExposureDrafts and other documents for public comment;

• National standard setters would publish their ownexposure documents at approximately the same timeas IASB Exposure Drafts and would seek specificcomments on any significant divergences betweenthe two exposure documents. In some instances,national standard setters may include in theirexposure documents specific comments on issues ofparticular relevance to their country or include moredetailed guidance than is included in the cor-responding IASB document; and

• National standard setters would follow their own fulldue process, which they would, ideally, choose tointegrate with IASB’s due process. This integrationwould avoid unnecessary delays incompleting standardsand would also minimise the likelihood of’ unnecessarydifferences between the standards that result.

The HKSA supports the integration of its standard settingprocess with that of the IASB as outlined above by adoptingthese procedures.

The Society’s Professional and Technical Departmentreceives a large number of queries on the application ofprofessional pronouncements and law. As a matter of theSociety’s risk management, and to deal with such queriesin an orderly manner, the Council gave its endorsement inFebruary 2002 to a policy on handling such technicalqueries.

A copy of the policy appears below. The main featuresof the policy are as follows:• The Society’s staff shall respond to members’ queries

on the Society’s official pronouncements.• The Society’s staff shall not respond to queries on the

application and interpretation of material not publishedby the Society, including matters of law and regulation(for example, company law, taxation law, StockExchange Listing Rules), as well as accounting,auditing and other professional requirements applyingin jurisdictions other than Hong Kong.

• The Society’s staff shall entertain queries only fromHKSA members (with limited exceptions for regulatorybodies and the news media). Guidance for others isprovided as to alternative sources of information forqueries.

Policy on Answering Technical Queries• Queries shall be in writing.• Responses to queries shall also be in writing and shall

be appropriately disclaimed in a number of respects.• Queries and responses in the form of “frequently asked

questions” may be posted on the Society’s web sitesubject to the same conditions under which an originalresponse is provided.

The policy, which has also been published on theSociety’s web site, may be modified from time to time asa result of experience.

Staff Policy on Handling Technical QueriesIntroduction1. The Hong Kong Society of Accountants (“Society”)

Council is empowered, in relation to the practice ofaccountancy, to issue or specify any:(a) statement of professional ethics; and/or(b) standards of accounting and auditing practices;required to be observed, maintained or otherwise appliedby any professional accountant1 .

2. Statements of professional ethics and standard accountingand auditing practices (collectively “Professional


SOCIETY NEWS

Pronouncements”), together with relevant interpretativeand other guidance approved by the Society’s Council,are published in the Society Members’ Handbook.

3. From time to time, the Society receives queries inrelation to the application and interpretation of itsProfessional Pronouncements and also receives queriesin relation to such other matters as the application ofthe law (for example, in relation to company or taxationlaw) or the accounting or other professionalrequirements applying in jurisdictions other than HongKong.

4. Outlined below is the Society’s policy in relation todealing with members’ technical queries such that theymay be dealt with in an orderly manner. The policymay be modified from time to time as a result of ourexperience.

Addressing Technical Queries with the Society5. The Society will receive queries on the application and

interpretat ion of the Society’s ProfessionalPronouncements.

6. The Society’s staff will respond to such queries subjectto the conditions outlined below:• The query should come from a member of the Society2

(with limited exceptions for regulatory bodies andthe media) – guidance for others as to alternativesources of information for queries is provided in para.15 below;

• The query should be in writing and addressed to theSociety’s Senior Director via mail, e-mail or fax;

• The query should include the member’s name,address, contact telephone number during normaloffice hours and membership number;

• The query should include a written statement of allrelevant facts and assumptions, and refer to availableauthoritative support and supporting rationale3 .Sufficient information on the situation andcircumstances to which the query pertains must beprovided but the query should be generic in natureand not relate to a specific enterprise or transaction(either actual or contemplated). The query shouldpreferably provide a suggested conclusion consistentwith the authoritative support and other referencescited;

• Members should include details as to whether or notothers have been consulted in respect of the queryand, if so, the facts provided to that person, and thedetails of their response. The query to the Societyshould, however, be kept generic and not refer to aspecific enterprise and/or fact situation.

7. If, in the Society’s view, the above conditions have notbeen met, the member may be asked to resubmit thequery, as appropriately raised, or the query may not beresponded to, at the Society’s discretion. In the lattercase the member will be informed of the decision.

8. The Society’s staff will not respond to queries on theapplication and interpretation of material not publishedby the Society, including matters of law and regulation(for example, company law, taxation law, StockExchange Listing Rules), as well as accounting, auditingand other professional requirements applying injurisdictions other than Hong Kong.

9. As a matter of policy, the Society’s staff do not respondto the following requests:• Providing advice on enterprise-specific and/or

detailed fact-specific questions;• Suggesting the appropriate audit opinion to be given;• Acting as an arbitrator regarding any issue or dispute;• Assisting in research for student assignments.

10. The Society staff will provide only written responses toqueries on the following basis:• The response is essentially the personal view of the

staff member providing the response and intended forgeneral guidance only. It does not constitute anauthoritative response on behalf of the Society;

• The staff member’s response is based on the facts andassumptions provided and may not apply if there is achange or discrepancy in those facts or assumptions;

• Reliance on the staff member’s response is entirelyat the enquirer’s own risk;

• Neither the Society nor its staff can accept anyresponsibility for the accounting treatment or for theapplication of auditing or other professional standardsin the particular circumstances (as applicable) appliedconsequent to the staff member’s response;

• Reference to the query and response, if any, may notbe made – and shall not be permissible as evidence –in the case of any complaint furnished to the Society.

11. Because of the Society’s limited resources to deal withmembers’ queries, it is generally not possible for Societystaff to attend to all queries necessarily in a timelymanner. Staff will strive to answer 95% of queries,which contain all of the information specified in thispolicy, within 10 working days of receipt.

LimitationsSociety’s Professional Pronouncements12. Note should be taken that the staff member’s response

is provided on a generic basis and should not beconsidered necessarily relevant to a specific enterpriseor transaction. A query provides typically only a selectedsummary of the scenario about which advice is beingsought and it is inevitable that the staff member will beless well informed, and consequently less able to provideappropriate advice, than an advisor who has becomefamiliar with all the relevant facts regarding the matterin question.

13. The Society’s staff are able to assist members by providinginformation that guides them to the most appropriatesource of information (such as the relevant Professional

The Hong KongACCOUNTANT 37A P R IL 2002

SO CIETY NEW S

Pronouncements). To enable meaningful discussions,members are expected to consult and understand therelevant Professional Pronouncements themselves f irstbefore further quest ions are raised.

14. The Society appreciates that judgement may be involvedin applying Professional Pronouncements and suggestsmembers s eeking speci f ic answers t o detai led f act-specific questions investigate other avenues for opinion,such as seeking an opinion from a fellow member, beforemaking up their own judgement.

15. As a last port of call for members’ queries on ProfessionalPronouncements, the Society encourages both membersand non-members to use other sources of informationavailable, which may include:

• For members of t he publ i c à a p ro f e s s iona laccountant 4, t he Soci ety’ s Free Publ i c Advi soryService Scheme5;

• For f inancial s tatement preparers à your externalauditor;

• For professional accountants à col leagues, fel lowmembers , t he Soc i ety’ s web s i t e i nc luding t hediscussion forum;

• For s tudents à l ibrary, lecturers, textbooks (seeattached reference lis t), and the Society’s web sitewhere you will find electronic copies of the Society’sstandards and detai ls of other professional literaturepublished by the Society;

• For enterpr ise-specif i c quer ies à t he enterpri seconcerned6 .

Legal interpretations and Professional Pronouncementsapplying in other jurisdictions16. The Society’s staff are not in a position to respond to

queries on the application and interpretation of the lawor of professional pronouncements not issued or specifiedby the Society. In the case of queries relating to the law,members are advised to seek independent legal advice.

Enterprise-specific queries17. It is Society policy not to comment on the specific facts

pertaining to a company or i ts f inancial s tatements.Enterprise-specific queries should be raised with theenterprise concerned.

18. On occasion, queries in respect of a specific enterprisemay be, or become, part of a matter of complaint to theSociety about the conduct of a member. Queries connectedwith an actual or proposed complaint should be directedto the Society’s Director of Professional Compliance.

Disclaimer19. As a matt er of pol icy, the Soci ety di s cla ims res -

ponsibility for any private comment or statement by any

of its staff. The views expressed by a staff member donot necessarily reflect the views of the Society, theSociety’s Council, or other members of the Society’sstaff. The Society’s staff response to a query on theSociety’s Professional Pronouncements reflects only thestaff’s personal views in the light of the particularcircumstances described by and the limited informationprovided by the enquirer and is purely for reference anddiscussion purpose only, and should not be regarded asthe official interpretation of the Society ProfessionalPronouncements. Official interpretations of the Society’sProfessional Pronouncements can only be establishedafter extensive deliberation and due process, and withthe approval of the Society’s Council.

Society’s Official Response20. Where members consider that there are deficiencies in

certain Professional Pronouncements that give rise tothe ambiguities or difficulties in the application ofProfessional Pronouncements, suggestions are mostwelcome.

21. Any such suggestions should be directed to the Registrarof the Society. These suggestions will be referred to therelevant standard-setting Committees for consideration,and the relevant Professional Pronouncements will beamended, where appropriate.

22. Owing to limited resources, the Society does not giveindividual responses to these suggestions.

Publication of Queries and Responses23. To widen the help to members, the Society may, where

appropriate, publish, or post on the Society’s web site,frequently asked technical questions and answers.

24. These will be published in generic terms withoutdisclosing the identity of the enquirer.

1 Professional Accountants Ordinance, section 18A(1).2 Reference to “member” means an Associate or Fellow of

the Society.3 For example, the requirements of the relevant SSAP.4 Note that the Society does not respond to queries on the

application and interpretation of the Society’s ProfessionalPronouncements from members of the public because it isinappropriate for the Society to be in competition with itsmembers.

5 Refer to the Society’s web site: http://www.hksa.org.hk/corporate_relations/community/index.php

6 Auditors, who are under a duty of confidentiality, aregenerally not permitted to respond to queries from thirdparties in relation to queries on a client.

The Hong Kong38 ACCOUNTANT A P R IL 2002

SOCIETY NEWS

On 6 March 2002, Antony Leung, the Financial Secretary,announced his first Budget. As soon as the announcementwas made, Mr Tim Lui, Chairman of the Society’s TaxationCommittee, met the press on the same day to present theSociety’s views on the Budget and how it would impact onthe economy.

Mr Lui said that the Society supported the approachadopted in the Budget of not introducing major revenuemeasures at a time when the economy in Hong Kong hasstill not recovered.

The limited one-off measures such as lifting the cap ofthe rates concession, waiver of business registration fee,concessions in relation to water and sewage charges andthe extension of the moratorium on the increase in ultra-low sulphur diesel duty, should help to keep down the costsof doing business in Hong Kong and provide some relief forthe community generally.

According to Mr Lui, while there may be some questionon whether any concession should be given in the light of aprojected deficit of $45.2 billion in 2002, the Society believesthat it is more appropriate to provide one-off concessionsrather than further permanent benefits, given the wideninggap between government revenue and expenditure.

“In our Budget submission to the Financial Secretary inDecember 2001, the Society pointed to the need for theGovernment to look critically at and control its ownexpenditure. In this respect, we support the FinancialSecretary’s target to achieve a balanced budget by2006-07,” said Mr Lui. “The efforts to reduce the overallsize of the civil service and the proposed salary reductionof 4.75% should help to some extent to achieve thattarget,” he added.

On the other hand, the very modest revenue measures

Budget 2002/03introduced in this Budget in relation to liquor and tobaccoduties and the Boundary Facilities Improvement Tax, suggestthat the Government will need to consider seriously theintroduction of a broad based consumption tax, such as agoods and services tax (GST), in the relatively near future.

Mr Lui said that the Society suggested that theintroduction of a land departure tax would be reasonableand equitable and should be given consideration. “Wetherefore support the Financial Secretary’s proposal tointroduce legislation for a Boundary Facilities ImprovementTax in 2002-03,” added Mr Lui.

The Society welcomes the references in the Budget tothemes such as the importance of Hong Kong building onexisting strengths in sectors like finance, tourism,professional services and logistics; strengthening theknowledge and skill base of the Hong Kong workforce; andenhancing cooperation with the hinterland of Hong Kongi.e. the Pearl River Delta. These accord with themes alsotouched upon in the Society’s budget proposals and it wouldin due course like to see further concrete measure in theseareas.

When the former Financial Secretary introduced thebenchmark for fiscal reserves, he indicated that it would bereviewed in due course. “We are interested to see that theFinancial Secretary has now reviewed this benchmark andhas concluded that a significantly lower level of reserveswould be sufficient. This may give the Government somebreathing space while they consider further e.g. broaderbased revenue measures. We look forward to hearing moreabout the revised analysis,” remarked Mr Lui.

As regards the need for broader-based taxation, theFinancial Secretary has apparently accepted the findingsthat the fiscal shortfall is not due only to cyclical causesand that less reliance should be placed on land revenuesand investment income. It is clearly reasonable and prudentthat these sources should be regarded as volatile and thatmore stable sources of revenue should be found.

The Financial Secretary’s outlook for the economy ispositive in the medium term with GDP growth of 1%forecast in 2002 and a trend growth rate of 3%. Accordingto Mr Lui, this is encouraging and should be welcomed.However, the ability to balance the budget in the mediumterm is dependent both upon the ability to keep a tight reinon expenditure and upon whether or not the revenue that isexpected to result from the forecast trend growth is inpractice attainable. This will be challenging for thecommunity and it will be important to retain sufficientflexibility to make adjustments as we proceed if theassumptions contained in the medium term fiscal objectiveprove to be over-optimistic.Mr Tim Lui commenting on the government budget

2002/03


SOCIETY NEWS

Education & Careers Expo 2002This year’s Education and Careers Expo was held on 21-24 February

at the Hong Kong Convention and Exhibition Centre. Jointly organisedby the Hong Kong Trade Development Council and the LabourDepartment, this annual exhibition had attracted participation from343 professional associations, academic and commercial organisations.

The Expo was an opportunity for the Society to disseminateinformation to school leavers, tertiary students and the workingpopulation about the Society’s Qualification Programme (QP) and theaccountancy profession in general. The theme of the Society’s boothwas ‘A Good Start in the Right Direction’. Response wasoverwhelming, our booth had attracted nearly 7,000 visitors duringthe four-day fair. Staff members from the Education & TrainingDepartment handled more than 500 enquiries on subjects ranging from the QP, mutual recognition agreements, accountingas a career to membership requirements. Literature on the QP and the accountancy profession was distributed.

On 23 February, as part of the Expo programme, the Society held a career seminar entitled ‘A Head Start in theAccountancy Profession’. The seminar, given by Ms Helen Wong, Assistant Director of Education & Training, attractedover 150 people. Participants included parents, tertiary and secondary students and other members of the public. Many ofthe participants showed a keen interest in choosing accountancy as their career.

IT Conference 2002The Society’s 5th Information Technology Conference, held on 2 February 2002, on the theme of “IT2 Information

Technology Information Trends”, attracted three excellent overseas speakers, who are at the forefront of innovation inaccountancy services and products. A first-class programme of local speakers, including the Hon Sin Chung Kai, theLegCo IT Functional Constituency Repre-sentative, also spokeon a range of subjects related to the theme.

Mr Anthony Pugliese, Vice President, Member Innovationof the American Institute of Certified Public Accountants,explaining how the AICPA helps its members capture newmarkets by leveraging traditional skill sets, such as auditing,and creating new ones, such as IT

The Hon Sin Chung Kai sharing his views on Hong Kong’snew IT laws and regulations

HKSA staff answering public enquiries at the Expo

Career Seminar “ A head start in the AccountancyProfession”


SOCIETY NEWS

The Society’s Building, Construction and Properties InterestGroup (BCPIG) was honoured to have Dr Eden Woon, Directorof the General Chamber of Commerce, present “Regional TradeAgreement between China & HKSAR” at its first DinnerReception, held on 22 February 2002.

In 2001, HKSAR Chief Executive Mr Tung Chee Hwa put forwarda Regional Trade Agreement (RTA) proposal to the CentralGovernment. During his presentation, Dr Woon discussed thebackground of Mr Tung’s RTA proposal and explained how it wouldbenefit Hong Kong’s economy. Dr Woon also explored theopportunities that the agreement would bring to the constructionindustry. Inspired by his excellent presentation, members obtaineda better understanding of the advantages and difficulties in carryingout the agreement.

Dr Eden Woon delivering his presentation at the dinnerreception.

Participants listen attentively to Dr Woon’s presentation.

BCPIG’s First Dinner Reception in 2002

The Society’s Registration and Practising Committee (R&PC), which deals with applications for membership, practisingcertificates, advancement to fellowship, registration of new firms/corporate practices and other related matters, has setits schedule for 2002 (please see below).

Submission deadlines must be observed if applications are to be processed on time. Applications received after thedeadline will be processed at the subsequent meeting. Formal approval by the Council will be granted to applicationsrecommended by the R&PC. Results are normally available seven weeks after the submission deadline.

2002 Deadlines (Revised in March 2002)

Submission deadline R&PC meeting at which applications will be processed

29 May 2002 June 200221 August 2002 September 20026 November 2002 December 2002

Application Deadlines for 2002

Mr Alan Wong, convenor of the BCPIG ExecutiveCommittee, presenting a souvenir to Dr Eden Woon.

The Council recently approved the registration of the following corporate practice with effect from March 2002:

Corporate Practice Name of Directors

FORWARD C.P.A. LIMITED Wong Yin Yin, Shally勵志會計師有限公司 Pang Kam Wah (Non-Member Director)

New Registrations


SOCIETY NEWS

Group photo with Professor Hiong and Shenzhen Universitystudents

The China Liaison Committee and Student AffairsCommittee (SAC) organised a two-day Shenzhen Study Tourthat was held between 8-9 December 2001. The purpose ofthe study tour was to provide opportunities for our studentparticipants to learn about recent accounting, auditing,taxation and economic developments in Shenzhen.

The participants of this study tour included twenty-sevenstudents, eight SAC/Student Function Group members, threeguests and one member of the secretariat staff. TheDepartment of Accountancy of Shenzhen University waskind enough to receive us and arrange all the activities forthe whole four-day study tour.

On the coach leaving Hong Kong, the tour leader andVice-President of the Association, Dr Joseph Yau, briefedthe participants on the whole program.

Firstly, we arrived at the Chan, Wong, Chung ConsultantService (Shenzhen) Company Limited. This company is afully owned subsidiary of Chan Wong, Chung & Company,a Hong Kong CPA firm. The Shenzhen office mainly providesaccounting and consulting services to clients in GuangdongProvince. Ms May Wu, a senior staff of the company,welcomed us and briefed us on the history of and servicesprovided by the company. A few of May’s colleagues alsoanswered our questions in relation to recent technicaldevelopments in the Chinese accountancy profession.

Dr Joseph Yau (first right) pictured with Ms May Wu (firstleft) and her colleagues

We then went on to a shoe-making factory, one of the topthree companies in this industry in Guangdong Province,where a manager showed us around the production linesand described all the processes in detail. Did you know thatthere over 100 steps are needed in the production flow for alady’s shoe! We also asked a lot of questions concerning thefirm’s marketing, purchasing, quality control, and humanresources.

On the morning of the second day, we were greeted byProfessor Hiong Chu Hiong, Head of the Department ofAccountancy of Shenzhen University, and a group of theaccountancy students. The gathering started with briefintroductions to Shenzhen University and the HKAAT byProfessor Hiong and Dr Joseph Yau respectively. After thepresentations, all the participants were divided into fivegroups for more intimate dialogues and exchanges. We hadlunch with Professor Hiong and his students in one of thestudent canteens. After lunch, Professor Hiong and thestudents showed us around the campus, taking in not justacademic buildings, but also the Arts Center, Sports Stadiumand Library where we purchased a lot of books in an openfair.

After leaving the university and before coming back intoHong Kong, we stopped over at Shenzhen Book Center foran hour where we all bought a load more books!

All of the participants agreed that this was a “added-value” trip in terms of the accounting knowledge gainedthrough the visits and interactions and friendships madewith Shenzhen University students, the comfortableaccommodation and transportation, the heavy and deliciousCantonese food and the purchases of books.

HKAAT News

Visit to shoe-making factory

Visit to Shenzhen University


SOCIETY NEWS

Visit to the Hong Kong Productivity Council

“What a meaningful journey!” said many of the participants who visited the Hong Kong Productivity Council. On themorning of 26 January 2002, 16 participants gathered excitedly in Kowloon Tong to visit the Council’s Headquarters.

The Hong Kong Productivity Council was established in 1967 with a mission of promoting productivity excellencethrough the provision of professional services to achieve a more effective utilisation of available resources and to enhancethe value-added content of products and services. It aims to increase efficiency and competitiveness in order to raise thestandard of living of the people of Hong Kong. It also implements a value-adding strategy through People, Process, Productand Partnership development in assisting Hong Kong companies to move upmarket.

This was a special visit arranged by the courtesy of the Hong Kong Productivity Council, which included visits to threecentres as follows:

1. Institute of Information and Media Industries: DigiHall 212. Product Development and Innovation Institute: TechMart

and Indoor Air3. Quality Information Centre and Best Management

Practices Institute: Powerhouse

Managers from the Professional Services Industry Groupof the Hong Kong Productivity Council also greeted us andanswered our questions at the end of the visit.

The Association would like to extend its special thanksto Hong Kong Productivity Council for making thiseducational and fun visit possible.

Group photo after the visit