Honorary AdvisersPresident and Vice-Presidents of the Hong Kong Institute of Certified Public Accountants
Board MembersDoug Oxley(President)Stella P L Cho(Vice-President)Wilson Y W Fung(Vice-President)Chan Cheuk HayJohnson C H KongAndy T M LiLindy W W Yau
Editorial CommitteeLindy W W Yau(Chief Editor)Selwyn S Y Cheng(Deputy Chief Editor)Lisa S K Wong(Deputy Chief Editor)Michael C W Wong(Monitor of the Issue)Peggy P K ChanCharles K C Chiu Thomas C F ChungChris K C Lau
Staff ResponsibleBo Bo F P Man(Assistant Director)Florence V Tong(Assistant Administrative Officer)
December 2007Hong Kong Institute of Accredited Accounting Technicians Limited香港財務會計協會有限公司
27/F, Wu Chung House,213 Queen’s Road East,Wanchai, Hong KongTel: 2823 0600Fax: 2823 0606Hotline: 2823 0660Web: www.hkiaat.orgE-mail: [email protected]
(Circulation: 9,200 copies)
Contents
HKIAAT News
President’s Message 1
President’s Engagements 2
Membership and Student Fees for 2008 2
Thanks to our Subject Reviewers 2
Annual Dinner and Prize Presentation Ceremony 2008 3
New AAT-branded Merchandise 3
Professional Bridging Examination
Feature Interview: Jimmy Lau 5
Top Students in the June 2007 Examination 6
2008 Examination Timetable 7
Important Notes for Candidates 8
Accounting Technician Examination
Top Students in the June 2007 Examination 9
2008 Examination Timetable 10
Important Notes for Candidates 11
Members’ Corner
Career Assistance: Making A Dream Come True
by William Tong 12
Featured Employer: Michael Tsoi & Co. CPA 15
Welcome to New Members 16
Continuing Professional Development 16
Studies in Foundation Accounting
Book-keeping and Accounts Examination
and Computerised Accounts Examination 18
Certified Accounts Clerk Qualification 20
Activity Highlights
Examination Technique Seminars 21
CPD Seminar 1 – Audit Risk Evaluation 22
Greenfield
Sudoku 23
Q&A 24
Features
Hong Kong Financial Reporting Standards: HKAS 27
by Lindy W W Yau and Morris Y M Kwok 25
Examination Techniques
by Dr. Teresa M H Ho 31
President’s Message
Doug OxleyPresident
Dear members and students
Time flies and I stand at the end of my second year as President of the HKIAAT. I am proud that the HKIAAT has been able to continue to make great strides throughout 2007. We have maintained a steady foothold in our core examinations: the Accounting Technician Examination and the Professional Bridging Examination. Our membership numbers are on the rise, with 1,507 members as at 1 December 2007.
In addition to the regular promotional and student activities, below are some highlights of our achievements in 2007:
• At the close of 2006, we appointed external consultants to review our current examination structure and syllabuses. The consultants researched on the market needs for accounting technicians in Hong Kong and developed a new qualification framework for the HKIAAT. Our parent institute, the Hong Kong Institute of CPAs, conducted a two-month consultation on this framework in the spring. We have now finalized the syllabuses and transitional arrangements for the New Qualification Framework, which will be launched in June 2009.
• In June, a batch of 143 students graduated from the first cohort of the Practical Accounting for Small and Medium Enterprises course. There are a further 700 students studying in the second and third cohort of this course, the only accounting course offered to senior secondary students under the Applied Learning Scheme (formerly Career Oriented Curriculum).
• In July, through our first Professional Development Programme, we were able to reach out to secondary school teachers who were interested in teaching the Applied Learning course.
• In November, the first HKIAAT CPD Seminar, on Audit Risk Evaluation, was successfully launched. We have always stressed the importance of our members to constantly update their accounting knowledge and skills through continuing professional development. The HKIAAT will continue to work hard in developing quality CPD seminars which are suitable for our members and students.
Reviewing our achievements in 2007 gives us the opportunity to reflect on how to better serve members and students in the coming year. Our biggest challenge in 2008 will be the implementation of the New Qualification Framework. We make a pledge that, here at the HKIAAT, we shall put our best efforts into helping our students throughout the implementation period. We look forward to your continued support in taking this big step forward together with us. Lastly but not least, on behalf of the HKIAAT, I wish you all a prosperous year ahead!
HKIAAT News
2
President’s Engagements
The President and other representatives of the HKIAAT attended the following events during November and December 2007:
• Hong Kong Inter-Tertiary Accountancy Association High Table Dinner 2007 cum Inauguration Ceremony• Hong Kong Institute of Vocational Education (Chai Wan) Student Awards Presentation Ceremony 2007• Hong Kong Institute of Vocational Education (Shatin) Student Awards Presentation Ceremony 2007• Vocational Training Council 25th Anniversary Dinner• The Hong Kong Polytechnic University Faculty of Business High Table Dinner 2007• The Vocational Training Council Graduation Ceremony 2007• Hong Kong Institute of CPAs Annual Dinner 2007• Hong Kong College of Technology 50th Anniversary Banquet• Hong Kong Institute of Human Resources Management 30th Anniversary Dinner
Membership and Student Fees for 2008
The annual membership and student fees will be due soon! Members and students should have received their renewal package in early December 2007.
For the calendar year 2008, the Board had decided that there will be no fee increase. All students of the Accounting Technician Examination will continue to pay the current student fee at HK$520, while the membership fee remains at HK$600. These fees will be due on 1 January 2008.
All members and students are obliged to pay the annual fees before the due date. Delay or failure to settle the fees for more than three months will result in removal of the member’s or student’s name from the register. Members and students whose names are removed must pay their registration fees again in order to be re-instated. Students who have claimed exemptions before are also required to pay the prevailing exemption fees again and must abide by the closing dates for registration for the examinations.
Members are further reminded that they are required to return the completed CPD Declaration Form to us to ensure that their membership can be renewed. For more information on CPD requirements, please refer to the “Members’ Corner” section of T/Dialogue.
Both members and students are reminded that the annual update form must be returned together with payment. Please notify us of any changes in your personal information, particularly the e-mail addresses, as we intend to increase our communication with our members and students through electronic means in the coming year. For further enquiries, please contact us at 2823-0600.
Thanks to Our Subject Reviewers
Articles published in the Features column during the second half of 2007 were reviewed by the following subject specialists:
Ms. Lisa Wong – Community College of City UniversityMr. Chris Lau – Hong Kong Institute of Vocational Education (Chai Wan)Ms. Arison Woo – PolyU Hong Kong Community College Dr. Teresa Ho – Kaplan Financial (HK) Limited
On behalf of the HKIAAT, the Editorial Committee would like to take this opportunity to thank all the reviewers for devoting their valuable time to this task.
HKIAAT News
�
Annual Dinner and Prize Presentation Ceremony 2008
Mark a date in your diary for Wednesday, 30 January 2008, when the HKIAAT Annual Dinner and Prize Presentation Ceremony will be held at the World Trade Centre Club. We are delighted to announce that Ms. Ada Chung, the Registrar of Companies, will be our Guest of Honour at the event.
The Prize Presentation Ceremony is an annual event that recognizes and commemorates the outstanding performance of HKIAAT top students, scholarship recipients from various educational institutes and winners of the Accounting Case Competition.
The dinner is also an occasion for accounting professionals and academics to get together. Honourable guests will include government officials, presidents / chairmen of professional bodies and business associations, and heads of academic institutes.
The tentative programme is as follows:
Time Event6:30pm Cocktail reception and registration7:00pm Prize presentation ceremony8:00pm Dinner (Chinese cuisine)
Members and students are cordially invited to attend the Ceremony. Please contact the Secretariat at 2823-0600 to reserve your seat on or before 10 January 2008. The charge for the dinner is HK$450. A confirmation/notice will be sent to confirm your reservation.
New AAT-branded Merchandise
Two new souvenirs proudly carrying our AAT-brand – a name card holder and a ladies’ scarf – are now available for purchase at the HKIAAT office. You can get an exclusive discount on these great items by presenting your member/student card!
ItemSelling price
Non-member / student Member / student
Scarf $180 $150
Name card holder $100 $80
The HKIAAT would not be held responsible for the content of the advertisement.
FTC AD
Professional Bridging Examination
�A few years ago, start-up programmer Jimmy Lau decided to take a different turn in his career and move into accountancy. HKIAAT was the door to a whole new world for him. Jimmy, an HKIAAT student, talks to T/Dialogue about his experience of taking the HKIAAT examinations and his career prospects.
Then and nowJimmy was a programmer at an IT company, where his main duties revolved around computer applications. As the IT market changes in the blink of an eye, specialists have to constantly adjust themselves swiftly in response to rapidly-changing business scenarios. Jimmy knew this kind of volatile environment wasn’t for him, while a career in the very systematic accountancy world sounded much more appealing.
With the company’s support and encouragement, Jimmy started to study for a more promising career which better mirrored his interests. “I have always been sensitive to numbers,” Jimmy claims. He enrolled on accounting programmes until he took up a job in which he had to be stationed in mainland China. Later, he picked up the London Chamber of Commerce and Industry International Qualifications (LCCI) courses. He then turned to the HKIAAT examinations as he found the syllabus to be practical and to be a good base for developing his ability in making assumptions and judgments based on a set of given numbers.
After taking a series of HKIAAT examinations to obtain his accounting qualifications, Jimmy is currently working as an accountant in a manufacturing company which exports toy products to the US market. Being an accountant isn’t all about reading numbers and figures. Jimmy uses his financial reporting expertise, analyzing the data in hand, to come up with financial forecast reports. With all necessary information, he can confidently present his analysis to the finance manager and communicate with the sales manager to prepare the operating budget, financial position forecast, monitor cash flows, promptly record all transactions and safeguard the company’s resources.
Just as Rome was not built in one day, this professional confidence was hard won. Before obtaining his professional qualifications from the HKIAAT, Jimmy went through periods during which he felt lost and confused, just like many others. He had also been caught in the middle of one of those been-there-done-that situations where he blindly followed
Feature Interview: Jimmy Lau
instructions executed by his supervisors without understanding the reasons why. After sitting the HKIAAT examinations, Jimmy now understands the mechanism behind the figures presented to him. He sees more than just plain numbers. Many times he finds himself capable of answering questions before being asked, or getting tasks done before they were assigned because now he possesses the accounting know-how. His supervisors are supportive and they encourage his further studies and as a better qualified staff member he will have more opportunities for advancement inside the company.
Speaking from experienceJimmy has the following thoughts and insights
on the Accounting Technician Examination (ATE). “The ATE is difficult at first. Once you have overcome the main hurdles, it gets easier.” As challenging as it sounds, Jimmy believes the ATE is of appropriate difficulty. “If the examination wasn’t of a certain standard, how could the HKIAAT maintain the quality of its members?”
To prepare for the ATE and Professional Bridging Examination (PBE), Jimmy’s key to success is concentration. “Do not underestimate the examinations as they demand high concentration. Do not spend the first half an hour of a study session getting all warmed up then wander off to play video games or go on a date. Time management is important,” Jimmy suggests. He thinks that many HKIAAT students tend to recite facts without understanding them. “Take business law as an example. Understanding is more effective when you remember; remembering is more effective when you understand. Students need to be made aware of the interaction between memory and understanding. Practice makes perfect. Revise, read some past papers, and read the questions carefully because they aren’t always straightforward. Even though the questions may change, application of theories stays the same.” Jimmy also suggests students take the initiative in finding responsive classmates and starting study groups. “Sometimes making it work by putting a collaborative effort together can be an effective study technique.”
Not only did the HKIAAT provide a clear and fast route for Jimmy to achieve his career goal, it has also given him confidence needed to operate in today’s highly competitive market. Upon completing the PBE, Jimmy hopes to get qualified and do part-time teaching for HKIAAT courses. We applaud his enthusiasm and wish him all the best in all his future endeavours.
Melanie Hong
Professional Bridging Examination
�
Top Student
Top Students in the June 2007 Examination
Chan Yat Lui
Mr. Chan was granted full exemption from the Accounting Technician Examination in December 2006 and completed the Professional Bridging Examination in June 2007. This was the first time he had taken the Professional Bridging Examination. He obtained his Associate of Business Administration in Accountancy from City University of Hong Kong in 2005. He is now working as an accountant in Yiu Cho Yan CPA.
Paper I – Financial Reporting
Thoughts from Mr. Chan:
I would like to take this opportunity to thank my family, girlfriend and colleagues for their kind support. Regarding my strategy in preparing for the examination, I believe that working hard is the only way to succeed in PBE. Also, I would recommend that candidates use the book “Financial Reporting” written by Lisa Wong and Teresa Ho. It helped me understand how to apply the accounting standards in a simple way.
Paper II – Management Accounting
Top Student
Tang Chi Ho
Mr. Tang was a graduate of the Accounting Technician Examination in June 2005 and completed the Professional Bridging Examination in June 2007. He is now working as an auditor in CIG CPA & Co.
Paper III – Financial Management
Lee Choi Ha
Miss Lee was granted full exemption from the Accounting Technician Examination in December 2006. This was the first time she had taken the Professional Bridging Examination. She obtained her Higher Diploma in Accountancy from the Hong Kong Institute of Vocational Education (Chai Wan) in 2006 and is now working as an audit assistant at Gentle Secretaries Limited.
Thoughts from Mr. Tang:
I am very honoured to share my study methods in the preparation for the PBE paper. I failed the Management Accounting exam when I first attempted it, so this is my second attempt at this exam.
I believe it is important to pick an appropriate place to study. I guess it really comes down to what really works for you and choose the most effective place to keep you focused.
Also, I believe that intensive discussions about the materials learnt in class will really help you understand the fundamental concepts. Not only can discussions help us remember what we learn in class, it also helps us prepare for discussions in QP workshops in the future.
So, my advice to students who want to improve on their academic results is this: really know where your weaknesses and strengths lie, make sure you find a quiet place to study, and participate actively in class. In the end, it really comes down to self motivation and the ability to focus, and I think all of us have it inside to excel.
I hope this is useful to all of you. I wish you the best of luck with your studies.
Professional Bridging Examination
7
Paper IV – Legal Environment
Leung Tsz Pui
Mr. Leung was a graduate of the Accounting Technician Examination in December 2005 and completed the Professional Bridging Examination in June 2007. He took the PBE Intensive Revision Programme at FTC Kaplan in 2007. He is now working as accounts clerk at Mitsubishi Elevator Hong Kong Company Limited.
Top Student
Thoughts from Mr. Leung:
I am glad to be the top student for this paper. I would like to thank HKIAAT for giving me this award.
My study strategies were to read the materials in the recommended reading list and refer to the ordinances in the Bilingual Laws Information System. These helped me better understand each topic and obtain a good result in the examination.
Practising past papers can teach you how to organize, present and elaborate your answers. A well-organized answer, in my opinion, will enable you to obtain higher marks.
Finally, I would like to thank those who have always supported me.
2008 Examination TimetablePaper Date Time
Paper I – Financial Reporting 12 June / 11 December 2008 (Thursday) 2:00 pm – 5:00 pm
Paper II – Management Accounting 14 June / 13 December 2008 (Saturday) 2:00 pm – 5:00 pm
Paper III – Financial Management 19 June / 18 December 2008 (Thursday) 2:00 pm – 5:00 pm
Paper IV – Legal Environment 21 June / 20 December 2008 (Saturday) 2:00 pm – 5:00 pm
The HKIAAT would not be held responsible for the content of the advertisement.
HKMA AD
Professional Bridging Examination
8 Date HKIAAT Action Candidate Action Remarks
The fourth week of February 2008
For students who have entered the December 2007 examination:
A combined Examination Results Report together with Status Report AND Examination Entry Form will be despatched.
Upon receipt of the Examination Results Report and Examination Entry Form, students must check that all details contained in the document are correct. If any of the data is incorrect, students should contact the HKIAAT IMMEDIATELY.
SCRIPT REPORT SERVICEIf a student wishes to have a written report on his/her performance, he/she should make a written application within two weeks from the date of announcement of the results and send this, together with the payment of a non-refundable fee of $680 per paper, to the HKIAAT.
Verbal, late or incomplete applications will not be accepted.
The HKIAAT will NOT deal with enquiries about the examination results.
Students should note that the script report service is NOT a re-marking exercise. It is purely an exercise to let the student know his/her performance in the examination.
For students who have not entered the December 2007 examination but are on the HKIAAT Register before 15 November 2007:
An Examination Entry Form will be despatched to students.
Upon receipt of the Examination Entry Form, students must check that all details contained in the document are correct. If any of the data is incorrect, students should contact the HKIAAT IMMEDIATELY.
For students who have successfully completed the Professional Bridging Examination in the December 2007 sitting:
An Examination Certificate will be ready for collection three months after the results are released.
29 February 2008 Students who have not received the Examination Report and/or Examination Entry Form or have misplaced them should contact the HKIAAT IMMEDIATELY for a duplicate copy.
No duplicates will be issued to students after 31 March 2008 (the deadline for Examination Application).
31 March 2008 Closing date for examination applications for the June 2008 examination.
Important Notes for Candidates (From December 2007 Results Announcement to June 2008 Examination Entry)
Accounting Technician Examination
�Paper 1 – Financial Accounting
Top Students in the June 2007 Examination
Yuen Man Chun
Mr. Yuen obtained a Bachelor degree of Engineering in Civil and Structural Engineering from the Hong Kong University of Science and Technology. He is now working as an audit assistant at S. F. Kwok & Co.
Paper 3 – Cost Accounting
Chong Lai Na
Miss Chong completed the Accounting Technician Examination in June 2007. She obtained the Diploma in Accounting Studies (Professional Accounting) at YMCA College of Careers in 2003 and is now working as an accounts clerk at Top World (Greater China) Ltd.
Yu Suet YimThis was the first time Miss Yu had taken the Accounting Technician Examination. She is now taking the Diploma course in Accounting Studies (Professional Accounting) at the YMCA College of Careers.
Paper 2 – Business Communication
Paper 4 – Information Technology Applications in Accounting
Leung Hoi Ting
Miss Leung studied the Certificate in Information Technology Applications in Accounting at the Hong Kong Management Association. She is now working as an audit semi-senior at CS Corporate Services Limited.
Top Student
Thoughts from Miss Yu:
I was a bit surprised when I heard I was the top student in this paper. What I would like to say is that understanding effective communication theories and applying them in real world situations are crucial to achieving your goals in the business environment.
If you are scared of writing business correspondence, you need to change your attitude. Just tell yourself you can manage it and get used to it; then you can do much better than you expect. Of course, we cannot be complacent. It is important to read through the course materials and practise more. You will find that this can help you refine and sharpen your writing skills.
Paper 5 – Hong Kong Taxation
Or Wan Ying
Miss Or completed the Accounting Technician Examination in June 2007. She completed the Hong Kong Taxation course at Hong Kong School of Commerce (HKSC) in 2006. She is now working as an assistant accountant at Full Home Limited.
Top Student
Thoughts from Miss Or:
I am very pleased to be the top student for this paper.
I would like to thank my teacher, Mr. Antony Sin at the HKSC. He was conscientious in teaching and was willing to answer students’ questions after class.
I think it is very important to find an interest in studies. It is very helpful
to fully understand each topic, as it improves memory. I also learned question-answering techniques by practising past papers.
Learning needs a lot of practice.
Don’t be afraid of failure. Try again and again, for failure is the mother of success!
Top Student
Thoughts from Miss Leung:
I am so surprised to be the top student in this paper. Here I would like to thank my lecturer at the HKMA, Mr. Atom Yuen, for his guidance and support during the class.
In fact, my study method is quite common. I believe practising past papers is
the most effective way to revise. You also need to stay sharp and focused during the examinations.
Accounting Technician Examination
10
Top Student
Paper 6 – Hong Kong Business Law
Kwong Hiu Ying
This was the first time Ms. Kwong had taken the Accounting Technician Examination. She studied the Diploma in Accounting Studies at the Hong Kong Management Association. She is now working as a research assistant at the Chinese University of Hong Kong.
Thoughts from Ms. Kwong:
I would like to take this opportunity to thank the Hong Kong Institute of Accredited Accounting Technicians Limited for giving me the award, as well as the knowledgeable teachers in the Hong Kong Management Association who helped me a lot in preparing for the examination.
I believe that you have to put sufficient time and effort when preparing for the examination. There are lots of resources and information you can get from the HKIAAT website and library. If you can fully utilize them, you can prepare for your examination in an easier and more efficient way.
Also, it is easy to get confused as accounting is changing so rapidly to keep in step with the dynamic commercial environment. My advice is that you should not just focus on your textbooks
and memorize everything for the examination. Instead, you should try to identify the important concepts and get supplementary information on them. You can also identify topics which you are weak at and focus on them.
If you still have difficulty, don’t worry, I am sure you can get help from your peers and your senior.
Paper 7 – Advanced Accounting & Paper 8 – Auditing
Ip Wai Chong
Ms. Ip was the top student in both Paper 7 and Paper 8. She was also the Top Student for Paper 1 in December 2005 and Papers 5 and 6 in December 2006. She completed the Accounting Technician Examination in June 2007. She took the Certificate Programme in Accounting Studies in Hong Kong Management Association in 2007 and is now working as an executive secretary at N.H. Consultants Co., Ltd.
Top Student
Thoughts from Ms. Ip:
It is my pleasure to receive this award. I sincerely thank Mr. K P Wong for his guidance and warm support.
Over the last two years, I have gained invaluable experience through studying in the accounting field, something which was brand new to me not long ago.
As you sow, so shall you reap.
Attitude is the key to success. Taking studies seriously and making a commitment to yourself will lead to the fulfillment of your goals.
2008 Examination Timetable
Date
Time
Friday, 6 June 20085 December 2008
Saturday, 7 June 20086 December 2008
Friday, 13 June 200812 December 2008
Saturday, 14 June 200813 December 2008
9:30 am –12:30 pm
Paper 1 – Financial Accounting
Paper 5 – Hong Kong Taxation
Paper 2 – Business Communication
Paper 3 – Cost Accounting
2:00 pm –5:00/5:30 pm*
Paper 7 – Advanced Accounting
Paper 4 – Information Technology Applications in Accounting*
Paper 8 – Auditing
Paper 6 – Hong Kong Business Law
*DacEasy Accounting for Windows v. 11 (English version) and Microsoft Excel 97 (or higher version) (English/Chinese versions) will be used in the Paper 4 examination. Please note that the time allowed for this paper is 3½ hours (from 2:00 pm to 5:30 pm).
Accounting Technician Examination
11Date HKIAAT Action Candidate Action Remarks
The fourth week of
February 2008
For students who have entered the December 2007 examination:
A combined Examination
Results Report together
with Status Report AND Examination Entry Form will be
despatched.
Upon receipt of the Examination Results
Report and Examination Entry Form,
students must check that all details
contained in the document are correct. If
any of the data is incorrect, students should
contact the HKIAAT IMMEDIATELY.
SCRIPT REVIEWIf a student wishes to have his/her script
reviewed, he/she should make a written
application within two weeks from the
date of announcement of the results and
send this, together with the payment of a
non-refundable fee of $330 per paper, to
the HKIAAT.
Verbal, late or incomplete applications will
not be accepted.
The HKIAAT will NOT deal with enquiries about the
examination results.
Students who make
a review application
are reminded that the
review result is final and
conclusive.
For students who have not entered the December 2007 examination but are on the HKIAAT Register before 15 November 2007:
An Examination Entry Form
will be despatched to students.
Upon receipt of the Examination Entry
Form, students must check that all details
contained in the document are correct. If
any of the data is incorrect, students should
contact the HKIAAT IMMEDIATELY.
29 February 2008 Students who have not received the
Examination Report and/or Examination
Entry Form or have misplaced them should
contact the HKIAAT IMMEDIATELY for a duplicate copy.
No duplicates will be
issued to students after
31 March 2008 (the
deadline for Examination
Application).
31 March 2008 Closing date for
examination and
exemption applications
for the June 2008
examination.
Important Notes for Candidates (From December 2007 Results Announcement to June 2008 Examination Entry)
Members’ Corner
12
Need a career that you really like?
Other than looking up classified advertisements and approaching
employment agencies or head-hunters for jobs, what else can
you do to build a career that you feel proud of?
Career assistance at local universities
Many of us probably came to know about career assistance from
career exhibitions or talks at secondary school. For university
students, career assistance takes a richer form and includes
career workshops, videos, summer job placements and graduate
recruitment talks. Some universities provide online career
assessment tools and psychological assessment tools to help
students find out their aptitude and career inclination.
Mentoring is introduced to provide guidance to students in
building a career. However, most mentorship programmes are
very short-lived and students’ benefits are mostly limited to an
opening ceremony, a couple of high table dinners and a few
meetings with their busy mentors during the whole course of the
mentorship. Professional quality mentoring has yet to emerge.
After graduation, those who are fortunate will land a job from
which they have some experience from a summer engagement.
Universities might provide some limited career counselling on
an individual basis upon request through their student affairs
offices. Activity-based career assistance is also available at
universities.
Career assistance in the US and Western Europe
What kind of career assistance can students expect on the other
side of the world?
In November 2005, the US Government’s Department of
Commerce launched a pilot career assistance programme project
as part of its leadership development programme to develop
leaders within the organization. The intention is to address the
shortfalls of “mission-critical occupations and competencies”
and to pave the way for succession plans for the following five
years. The department received high-level support from the
Office of Personnel Management to develop this “Human Capital
Management Plan” (US Department of Commerce, 2005).
Career Assistance: Making A Dream Come TrueWilliam Tong
In the commercial sector, companies offer professional career
counselling to those not only in their home country, but also for
employees preparing for expatriation to other host countries.
This transition calls for assistance not only for the expatriated
staff but also for their spouses. This is one aspect of the so-called
dual career assistance.
In a comprehensive career assistance programme, one can
find career workshops covering individual development plans
to match the aspirations of the individual with the nature of
certain professions. Participants are also given training on job
applications, resume writing, interview techniques and job
search skills. Web learning and psychometric tests are used to
facilitate a convenient and effective training. Career assistance
has become more client-centred rather than activity-based.
Dual career assistance
As employers become more conscious of the importance of
the work / life balance, career assistance is being extended to
the spouses / partners of the newly recruited, particularly for
executives who are considered valuable to the organization.
For example, certain universities offer dual career assistance by
including job-seeking services for the spouse / partner of newly
recruited faculty and department heads. Internet resources such
as links to job databases and recruitment agencies, and specific
number of hours of individual counselling, are provided to help
the spouse / partner with their job searches. This happens at
the Virginia Polytechnic Institute and State University (Virginia
Tech, Human Resources) which started its career assistance
programme in autumn 2005.
Where internal resources are not available to support these
services, they are procured from professional coaching firms.
Professional coaches with different expertise ranging from
placement specialists to psychologists are made available to
ensure best use of psychometric assessments and tailored-made
individual career coaching.
Other than providing support at the local scene, dual career
assistance also takes on an international form to serve
multinational businesses. This is very much so when relocation of
executives is required in the course of expanding businesses into
other parts of the world. Career coaching firms, as a business
Members’ Corner
1�
partner, are now also growing into these major cities in provision
of expatriation support alongside the multinational expansion.
Before leaving their home country, expatriate staff and their
spouses are given briefing sessions on the host country from
these professional coaches to prepare them for possible cultural
shock. Host country orientation continues upon arrival, using
host country coaches, and is coupled with job-search coaching
for the spouse / partner.
Career assistance beyond university
For those who have turned to other educational institutions
for their post secondary studies, and those who have started
employment already, career assistance may seem to be a remote
luxury. Young people trying to build a successful career have
only themselves to rely on.
Certain professional accounting associations provide a placement
service to the extent of providing an updated bulletin board for
classified job advertisements and internet links with job-search
databases for students and members, as well as career planning
seminars for secondary school leavers. Individual coaching is too
costly to be generally available. Leung S.A. (2002) considers that
Hong Kong is still at an early stage of counselling and there is
a lot to learn from human resources development in the US.
The use of assessment tools in Hong Kong is limited, partly due
to language and cultural differences. Almost all of these tools
are in English and therefore are subject to language biases.
Although these tools have been tested in Western cultures,
they have not been proven by research to be applicable to the
Chinese community and the occupational structure here in Hong
Kong. With the limited usage of assessment tools, and limited
availability of individual career counselling, career assistance has
yet to see its potential unleashed.
Career assistance programme and employee assistance
programme
Career assistance programme should be distinguished from
employee assistance programme. Career assistance programmes
focus on providing assistance to members of the staff to
help them establish a career within the organization, and are
extended to their spouses in certain situations (such as for new
recruitments and for expatriation) to help them settle as quickly
as possible so that their performance is not affected by personal
problems that might arise. Employee assistance programmes are
mostly given to staff who are have personal issues which might
affect their performance and are too sensitive to be revealed
to other members of the staff within the organization. These
call for third-party intervention to provide counselling services
to help the employees overcome their problems. Executive
coaching is an example of third-party intervention.
The purpose of an employee assistance programme is two-fold:
preventive and maintenance. Recruitment costs are high and
helping employees solve personal issues directly promotes their
wellbeing and reduces staff turnover. Companies may wish to
maintain or even to enrich their employees’ performance level by
providing private professional counselling services to employees
in need. The key to the success of such a plan is to make sure
there is a confidential situation so that employees feel safe about
disclosing their personal issues with the private coach assigned
to them while the company shoulders the coaching costs.
Employee assistance programmes are also given to employees
who are about to leave the organization, often because of
downsizing or acquisitions and mergers. The programmes aim
to help the out-going employee find a job to continue their
career; at the same time they help avoid bad-mouthing from
employees who have to leave the company.
Career assistance in multinational corporations
Career assistance is gaining ground in multinational companies
where human resources are greatly valued as assets. Companies
using career assistance tend to be those that want to maintain
the high quality of human resources needed in their management
functions, and for innovative functions such as design office.
How local accountants might react to career assistance
Chinese accountants, being more reserved by nature culturally
and professionally, may find it difficult to accept taking the
initiative to approach an internal service within their organization
to plan their career. They might find it strange to sit in a class
on resume writing and interview techniques for fear that their
immediate supervisor might suspect their loyalty. Careless action
like this might undermine department stability, which is already
weak in the relatively volatile human resources market witnessed
in the accounting field in recent years. For these reasons, a full-
fledged career assistance programme may not find much room
for development among accountants in small and medium-sized
enterprises in Hong Kong. As for the Big Four, even though these
firms are becoming increasingly conscious of the need for a good
work / life balance among their staff members, their employees
sometimes still find their workload to be too heavy to continue
their career in these trying environments. An accounting career
therefore often seems to drift because of an introverted culture
and work stress, rather than following a charted course.
Members’ Corner
14
Value of human resources
It is impossible to over-stress the importance of matching interests
to a career in order to make the career a happy and rewarding
one. Often stories are told about people taking no interest in
their profession from the very start, and these people getting de-
motivated to the extent of becoming resentful, regretful and yet
feeling helpless about having invested a lifetime in a profession
they do not like. Given competitiveness, one might find it too
risky to change profession as time goes by, and therefore become
stuck with a job (not even a career) until retirement comes. The
obvious result is constantly jumping job whenever there is some
element of bargaining power. However, when that power is
gone, stagnation and lifelessness set in. At the organizational
level, this phenomenon increases recruitment and retention
costs. At the societal level, this is a waste of human resources.
Future of career assistance
Student accountants might look to their institution to provide
support in terms of professional orientation before they embark
on their quest for the numerous qualifications. Professional
bodies can contribute more to nurturing future accountants by
continuously helping student members during their qualification
process.
If you were invited to make a dream career for yourself, what
would your dream be? Some may see a career starting with an
initial orientation and aptitude assessment, and provision of
career counselling in terms of recurrent workshops and online
interactive assessment and training, plus just-in-time individual
career counselling so that they are able to reflect and reassess
their career direction as they mature in their profession. Those
who are serious about their profession will aspire to a happy
career and perhaps even become one of the future leaders in
this profession.
The Author
William Tong is an executive and life coach. He has enjoyed a multi-disciplinary career. Not only is he an
accounting professional and a business executive, he is also a certified clinical hypnotherapist from the US. He
has studied how the brain functions in the context of learning. He is now a professional trainer in management
soft skills and he coaches executives and business owners for excellence. As a project manager of a MNC, he
provides expert advices on the final screening of executive trainees recruited from top universities. He has also
been a mentor to many local university students since 1998. Last year, he was featured in the Tuesday Report
on TVB Jade channel on the subject of life coaching. He can be reached at [email protected].
Professional institutions and their governing bodies can join in to
take a more humanistic perspective to membership development
by going beyond membership size and quality control and
adopting a more client-centred focus in career assistance
programmes. The US model offers a good starting point.
References:
Leung S.A. 2002, “Career counselling in Hong Kong: Meeting
the social challenges”, Career Development Quarterly.
Retrieved 11 November 2007 from http://findarticles.com/p/
articles/mi_m0JAX/is_3_50/ai_84558588/pg_7
US Department of Commerce, “Leadership Development: Career
Assistance Program”. Retrieved 7 November 2007 from http://
ohrm.os.doc.gov/Leadership_Development/PROD01_001247
VirginiaTech, “Dual Career Assistance Program at Virginia Tech”.
Retrieved 7 November 2007 from http://www.hr.vt.edu/
employment/dualcareer/
Members’ Corner
1�After more than 30 years in an accounting practice, CPA Michael Tsoi is an advocate for training the younger generation and he knows the importance of giving trainee accountants a platform to get connected with the real world. His firm, which is located in the heart of the hustle and bustle of Central district, is packed with boxes of books. “These are stashes of money,” Michael tells his employees.
Small but mighty
Michael started out as a sole proprietor. Today, the firm has expanded to 15 employees: one CPA, one supervisor, four audit seniors, two secretaries and seven juniors/trainees. The group provides one-stop services and accounting solutions for companies. “In a medium-sized firm, the accountant is the consultant,” Michael says. Compared to big accounting firms, accountants in small and medium-sized firms tend to be less specialized so they have to be more versatile and more flexible. Michael sees that fresh graduates tend to be fond of working for big accounting firms; only a few prefer to work in a small firm like his. “Big firms offer training but often they tend to be specialized in one particular field. Small firms, however, can offer students a more comprehensive perspective on the real world.”
The practical dimension is important
Over the years, Michael has employed a variety of graduates at different levels from both local institutes and overseas universities. “HKIAAT students are very practical, courteous and willing to work.” Michael often intentionally assigns them duties such as filing documents with the Inland Revenue Department or discussing tax queries with an assessor on the phone. He believes that trainees need to learn to take up tasks and know how to deal with the everyday matters. “The immensely practical dimension of this career can only be learned from experience.”
The main problem he sees with students is that they are sometimes not sensitive to relevant current issues. “How much of a successful accountant could one possibly be without knowing the name of the Commissioner of Inland Revenue? If students only focus on studying theory and working behind a desk, they are good for nothing.” He feels that the experience in an audit firm is useful for later jobs. He also thinks that students should open their minds more. “Financial accounting, such as analyzing balance sheets and giving correct interpretations, is students’ largest weakness. Overseas graduates are very open with ideas and opinions, while Hong Kong students are not. Local students embrace politeness but lack an open mind.”
Featured Employer: Michael Tsoi & Co. CPA
“Talk like an accountant”
Michael started hiring HKIAAT students three years ago when he became acquainted with the employment placement service offered through T/Dialogue and the HKIAAT website. Three HKIAAT students are currently employed in Michael’s firm. As practical as the HKIAAT students are, Michael is concerned about their language ability and communication skills, both in spoken and written English. “A successful accountant has to be able to present oneself,” he maintains. While he thinks that students’ business communication skills and overall English standards need to be polished, he points out that Putonghua is equally essential. Michael also suggests the HKIAAT to evaluate the students’ minimum education requirement as to raise the general education standard.
Students today are elegantly dressed and well turned out but their confidence should come from within. “You have to talk like an accountant,” Michael asserts. He recommends that students should consider receiving training abroad for one or two years. “A connection with an overseas practitioner, especially one in the UK or Australia, could yield a valuable life-time experience.”
When it comes to the HKIAAT papers, Michael points out the importance of Paper 7 – Advanced Accounting, since financial interpretation is vital in this industry. “The HKIAAT papers are practical. If students aspire to become a CPA, passing HKIAAT exams is their way to enter the QP. With more practical experience in an accounting firm, they can set up their own practice.” Michael is happy to see his trainees eventually prosper to setting up their own business with their own names. “Being a CPA is a level of satisfaction, for many it’s a dream come true.” And now, Michael is looking to pass the torch to his brightest trainees. “I welcome partners. After all, I am an old man. I can’t take everything to the grave.”
Melanie Hong
Members’ Corner
1�
Welcome to New Members
Associate
AU Pak Lun Patrick
CHAN Chui Shan
CHAN Man Wah
CHAN Tak Yee
CHANG Chi Wai Stanley
CHENG Kam Hung
CHEUNG Ngar Man
CHEUNG Yu Hong
CHOW Tsz Ho
CHU Pui Man Carman
FOK Tat Choi
HA Suk Man
HO Yiu Fai Leo
IP Kai Ho
IP Wai Chong
KAN Cheuk Him
KOO Tak Shing
KWOK Mei Kwan
LAM Crystal
LEUNG Ka Ling
LEUNG Kin Ming
LEUNG Nga Wun
LEUNG Tik Sun
LEUNG Yu Yan
LIM Kwun Ping
LUI Sin Yee
MAN Ling Sui
MOK Ngo Yin
NGAI Mei Fung
POON Chung Yin
TSANG Ka Wun
TSE Ho Yin
TSOI Man Shut
WAN Yin Ki
WONG Hiu Yan Goldie
The HKIAAT would like to extend its warmest welcome to the following new members:
Fellow
WONG Kit Mei
WONG Kwok Kuen
WONG Miu Yee
YEUNG Cheung Kit
Fellow
CHEUNG Shun Kin
CHOW Ka Yan Michelle
FUNG Wang Wai
HA Wai Yi Katherine
HO Sin Lin
HO Siu Hong
HONG Cheung Yau
HUNG Ling Ling
IP Ka Yee
KWAN Kee Wai
LAI Kwai Fong
LAI Mei Kuen
LAU Bo Yiu
LAU Ka Wai
LAW Wing Chun
LO Sin Yi Martina
LUK Po Ling
MUNG Mei Tsz Monica
NG Ka Pui
OR Wan Ying
TAI Sau Han
TAM Mei Yan Amy
TANG Yuet Ying
WONG Fung Sang
WONG Wai Kwan
WU Lai Ping
YEUNG Man Ying Mandy
Continuing Professional Development
CPD Declaration
Members are reminded that they are required to comply with a minimum of 20 hours of unstructured Continuing Professional Development (CPD) requirements per year upon renewal of membership. Time spent by a member in assimilating knowledge on
professional, technical and managerial subjects relevant to his or her own work in the profession of accountancy, is considered to be
an indication of CPD achievement. Unstructured CPD will normally be achieved through private reading and study. Details of the CPD
guidelines can be found on our website at www.hkiaat.org/index.php/membership/index/45/.
The reporting period for CPD compliance is a period of 12 months commencing from 1 December each year and ending 30 November
of the following year. For those who join us in the middle of the year, the CPD requirements are imposed on a pro-rata basis. Those
who join in November will be exempt from any CPD requirements for that year.
A declaration form together with the debit note for the annual membership fee has been sent to all members. You are required to sign
and return the form to the Secretariat as a confirmation of your fulfillment of the CPD requirements before the deadline.
Members’ Corner
17
Upcoming CPD Programmes
The Hong Kong Institute of CPAs (HKICPA) is organizing the following CPD Programmes in January and February 2008. Our members enjoy the same fee as HKICPA members and students. Apart from regular seminars or conferences, there are also e-learning programmes, workshops on soft skills and courses of longer duration on Putonghua. If you are interested and would like to enrol in these programmes, please visit the Institute’s website on professional training at http://www.hkicpa.org.hk/membership/cpd/activities/activities.php.
Date and Time Topic Format Language Fee
7 January 2008
6:30 pm – 8:00 pmShare Placements and Rights Issues Seminar English $180
10 January 2008
6:30 pm – 8:00 pmThe Most Promising Frontier, Media, in China Seminar Cantonese $180
11 January 2008
6:30 pm – 8:00 pmAccurate Forecasting with Business Intelligence Seminar Cantonese $180
12 January 2008
9:30 am – 5:30pmWhen a Leader Should Apologize– And How? Workshop Cantonese $1,350
14 January 2008
6:30 pm – 8:00 pm
Wealth Management in Hong Kong & Mainland
China: Opportunities for CPAsSeminar Cantonese $180
15 January 2008
6:30 pm – 8:30 pmAn Introduction to Islamic Finance Seminar English $180
16 January 2008
6:30 pm – 9:30 pmHKAS 12 Income Taxes (re-run) Seminar Cantonese $400
19 January 2008
2:30 pm – 6:00 pmImplementation of HKSQC 1 and HKSA 220 Workshop Cantonese $670
21 January 2008
6:30 pm – 9:30 pm
HKAS 17 and 40 Leases and Investment Property
(re-run)Seminar Cantonese $400
24 January 2008
9:30 am – 11:30 am
Forum on the use of the electronic Practice Review
Self-Assessment Questionnaire (e-Questionnarie)Forum English
Free of
charge
25 January 2008
6:30 pm – 8:30 pm
Derivatives and Hedge Accounting, a Valuator
PerspectiveSeminar Cantonese $180
26 January 2008
9:30 am – 5:30pm
Managing Information Resource – The Business-IT
StrategyWorkshop Cantonese $1,350
28 January 2008
6:30 pm – 8:00 pmCorporate Governance Seminar English $180
29 January 2008
9:30 am – 5:30pmManaging up: Throwing the Elephants Workshop Cantonese $1,350
30 January 2008
6:30 pm – 8:30 pm
How to Exploit and Evaluate Physical Security
DevicesSeminar Cantonese $180
28 February 2008
6:00 pm – 8:00 pm
Forum on the use of the electronic Practice Review
Self-Assessment Questionnaire (e-Questionnarie)Forum English
Free of
charge
Studies in Foundation Accounting
18
Book-keeping and Accounts Examination and Computerised Accounts Examination
Top Students in the June 2007 Book-keeping and Accounts Examination
English Paper
Wan Chun Wah
Mr. Wan is student from Wah Yan College, Hong Kong. He studied by himself for the Book-keeping and Accounts Examination.
Top Student
Thoughts from Mr. Wan:
When I took the June 2007 Book-keeping and Accounts Examination, I was just a Form � student and had studied accounts in my private study. It is really my honour to be one of the top students in the examination.
Although accounting is considered to be a business subject, we should study it in the same way we study the science subjects. Accounting requires you to have a crystal clear understanding of the underlying principles and concepts. If you don’t understand something, please ask your teachers. They can definitely help you a lot.
My advice is to do more exercises in order to equip yourself with better accounting knowledge. In doing exercises, you can find out which areas you are weak in or
concepts you do not understand well.
Being diligent and having a clear understanding can help you achieve outstanding results in accounting.
Lo Kai Wing
Mr. Lo is a student from St. Joseph’s College studying for the Hong Kong Advanced Level Examinations.
Top Student
Thoughts from Mr. Lo:
Being focused and meticulous are very important in doing accounts. There is no shortcut: practice makes perfect! The only thing that matters is whether you really enjoy what you are studying.
Siu Chi Fai
Mr. Siu is a student from St. Joseph’s College studying for the Hong Kong Advanced Level Examinations.
Top StudentThoughts from Mr. Siu:
I would like to share my study tips with other students. I pay attention during lessons even when I am very tired. After I understand the materials, I do many exercises for practice. I check and review my answers carefully. I find out why some answers are wrong and remind myself not to make the same mistakes again.
Studies in Foundation Accounting
1�
Keung Yuen Fung
Mr. Keung is a student from Hang Seng School of Commerce studying for the Hong Kong Advanced Level Examinations.
Top Student
Thoughts from Mr. Keung:
I am Michael Keung, a Form 7 student from Hang Seng School of Commerce. It is a great honour for me to become a top student of the June 2007 Book-keeping and Accounts Examination (English). May I take this chance to thank my school, teachers and family, and the HKIAAT. Without them, I could not obtain this award.
I am very interested in accounting and finance. I aim to study these subjects at university. The HKIAAT is one of the most prestigious and respectable institutes providing an accounting qualification. Obtaining this qualification is very useful not only for my studies but also for my future career. I hope the HKIAAT and other institutes can continue to provide more high quality courses, training and examinations to students in the future.
Only practice and a thorough understanding of theory can lead to success in examinations. By doing a lot of exercises, plus having tons of determination, I am sure that you can obtain a good result in your accounting examinations.
Chinese Paper
Cheung Kam Ting
Miss Cheung is a student from Concordia Lutheran School – North Point.
Top Student
Thoughts from Miss Cheung:
It gives me great pleasure to be awarded the top student prize in the June 2007 Book-keeping and Accounts Examination. I believe that the key to success is hard work. As the old saying goes, “Practice makes perfect”, so I did lots of exercises to prepare for my examinations. In the future, I want to be a professional accountant. I believe if I continue to work hard and put great effort into my studies, I can meet this goal. I would like to thank Mr. Larry Lee, my accounting teacher, for his guidance and support.
Top Students in the July 2007 Computerised Accounts Examination
Chan Yuk Yin
Miss Chan obtained a Certificate in Computerised Accounts from the Hong Kong Management Association in 2007. She is now working as a treasury coordinator at Sime Darby Hong Kong Finance Limited.
Top Student
Thoughts from Miss Chan:
It is my great pleasure to be awarded a top student prize in this paper. I would like to share my joy with those who have encouraged and supported me along the way. My bosses, Ms. Judith Leung and Mr. C S Wong, have been very kind. Their trust and encouragement in helping me acquire a better knowledge of accounting are much appreciated. I would also like to thank my teacher, Mr. Michael Lam, whose clear and organized instructions have enabled me to understand this subject. I cannot lay claim to any unique study method: what I did was simply practise as many past papers as possible, and to pay heed to the answering techniques in past papers.
English Paper
Studies in Foundation Accounting
20
Fan Hiu Ting
Mr. Fan is now studying Diploma in Professional Accounting at the Hong Kong Christian Service Kwun Tong Vocational Training Centre (KTVTC).
Top Student
Thoughts from Mr. Fan:
I started to study in KTVTC in September 200�. I studied hard and discovered my real interest in accounting. In the second half of the school year, we had to learn DacEasy. Thanks to the kindness and clear teaching of my teachers, I learnt the basic concepts of the subject efficiently. To me, one important aspect of my success is to revise what is learnt quickly. Instead of just taking notes, analyzing is also important. By discussing homework with my classmates, I can also grasp concepts more clearly.
I believe that to become a professional accountant I have to gain more work experience and continue to upgrade my knowledge with the HKIAAT.
December 2007 and January 2008 Examinations
Examination Entry Acknowledgements and Examination Attendance Dockets for the above examinations were sent to schools or candidates in November and December 2007 respectively. Students should inform the HKIAAT in good time if they have not received an Examination Attendance Docket or have misplaced it.
Application for the Coming Sessions
Book-keeping and Accounts Examination
Application deadlines15 April 2008 for the June 2008 session
15 October 2008 for the December 2008 session
Examination dates21 June 2008 for the June 2008 session (English and Chinese Papers)
20 December 2008 for the December 2008 session (English Paper ONLY)
Examination time 2:00 p.m. – 5:00 p.m.
Fee HK$300
Computerised Accounts Examination
Application deadlines30 April 2008 for the July 2008 session
31 October 2008 for the January 2009 session
Examination dates5 July 2008 for the July 2008 session
10 January 2009 for the January 2009 session
Examination time 2:30 p.m. – 5:00 p.m.
Fee HK$430
Applications for examination entry are accepted throughout the year. It takes three weeks to assess the applications and to send confirmation letters. Please ensure that your residential address is correct and you can be reached by mail. It is your responsibility to notify us of any change to your personal details in good time. If you find any discrepancies in the information sent to you, please contact us immediately.
Certified Accounts Clerk Qualification
We are pleased to announce that Miss Lo Kwan has successfully completed both the Book-keeping and Accounts Examination and the Computerised Accounts Examination and has been awarded the Certified Accounts Clerk qualification.
Activity Highlights
21
Examination Technique Seminars
The following Examination Technique Seminars were held recently to help students prepare for the December 2007 examinations.
Professional Bridging Examination (PBE) Speaker
27 October Paper I – Financial Reporting Ms. Shirley Wong
12 November Paper II – Management Accounting Mr. Frederick Woodier
27 October Paper III – Financial Management Mr. Michael Wong
26 October Paper IV – Legal Environment Mr. Kenneth Chang
Accounting Technician Examination (ATE) Speaker
26 October Paper 3 – Cost Accounting Mr. Andy Li
20 OctoberPaper 5 – Hong Kong Taxation Mr. Au Yeung Sin Kai
Paper 6 – Hong Kong Business Law Mr. Alfred Chan
27 OctoberPaper 7 – Advanced Accounting Mr. Patrick Ng
Paper 8 – Auditing Mr. David Chow
The Examination Technique Seminars were held at the Hong Kong Institute of CPAs’ training rooms. A seminar for ATE Paper 3 (Cost Accounting) was added to the regular seminars in order to help students studying this subject. Speakers covered a wide range of topics including examination format, the different types of questions and corresponding answering techniques. Speakers also shared study tips and introduced supplementary resources students can refer to when studying for examinations. Sound illustrations were made by reference to the Question & Answer booklets. The Q&A sessions were very useful as they enabled speakers to point out areas to which students should pay more attention to during their studies.
We would like to take this opportunity to thank all the speakers for their time in preparing for the seminars which were extremely helpful to the students studying for the HKIAAT examinations.
At the examination technique seminars.
Activity Highlights
22
CPD Seminar 1 – Audit Risk Evaluation
HKIAAT’s first CPD Seminar was held on Monday, 19 November 2007 at the HKICPA Training Centre.
Our speaker, Mr. Simon Wong, shared his valuable auditing experience and insights from his audit career with our members and students. After reviewing the auditing standards in detail, Mr. Wong went on to explain the different types of risks involved in performing audits. He also provided practical advice by illustrating his points with some case studies. Members and students left the seminar feeling better informed about things to look out for when performing audits and having received some valuable tips on how to improve their audits.
We would like to take this opportunity to thank Mr. Wong for sparing the time to speak to our members and students on this topic at this successful seminar.
Mr. Simon Wong introducing HKSA 200.
The HKIAAT would not be held responsible for the content of the advertisement.
St. perth AD
Greenfield
2�
To: Hong Kong Institute of Accredited Accounting Technicians Limited, T/Dialogue Entry Form for Sudoku – December 2007 Issue
Name:
Address:
HKIAAT Member / Student*:
Registration No.:
Telephone No.: (Home)
(Office)
(Mobile)
* Please tick the appropriate box
Yes No
(To keep your Journal in good shape, please use a photocopy of this form.)
SudokuThanks to all of you who sent in your entries to our last Sudoku puzzle. We appreciate the effort made by all members and students who participated. The first 10 entries with the right answers have won a HK$100 Park’N’Shop cash coupon. Congratulations to the winners!
Answers to the October 2007 issue puzzle
Winners of HK$100 Park’N’Shop cash coupon:
1. CHAN Kwai Chun2. CHAN Wai Sun3. CHEUNG Lai Fong4. CHEUNG Wai Chun5. LI Wai Chun6. MAN Elite7. SIU Wai Ching8. TAM Yim Ting9. YIP Ho Kwan10. YIP Sin Yee
Notification has been sent to the winners. Please collect your Park’N’Shop cash coupon at the HKIAAT reception on or before Thursday, 31 January 2008.
(Source: www.puzzles.li)
Try Our Sudoku!
Want to be in our next batch of winners? Have a go at the Sudoku puzzle below and send in your entry as soon as possible to 27/F, Wu Chung House, 213 Queen’s Road East, Wanchai, Hong Kong (Fax: 2823 0606). Prizes will be given to the first 10 entries with the correct answer on a first-come-first-served basis. The solution and winners’ list will be published in the next issue.
December 2007 Sudoku:
Sudoku is a placement puzzle, also known as Number Place. To complete the Sudoku, you must enter numerals from 1 to 9 in each cell of a grid. Each row, column and 3 x 3 region (as marked) must contain each numeral once only.
6 4 3 8 9 2 5 7 1
8 7 1 6 4 5 2 3 9
2 9 5 7 3 1 4 6 8
5 1 6 9 8 3 7 2 4
4 8 7 2 5 6 1 9 3
3 2 9 1 7 4 8 5 6
7 3 2 4 6 8 9 1 5
9 6 4 5 1 7 3 8 2
1 5 8 3 2 9 6 4 7
6 4 5 9
5 1 3
5 8 2
6 9 5
2 7
6 1 3
2 4 7
9 7 1
1 6 3 8
Greenfield
24
The Q&A section here is to answer questions from members and students. You are welcome to write to us with your queries at:
Q&A, Greenfield, T/DialogueHong Kong Institute of Accredited Accounting Technicians Limited27/F, Wu Chung House213 Queen’s Road EastWanchai, Hong KongFax: 2823 0606E-mail: [email protected]
Q&A
Q: I have just joined the HKIAAT as an associatemember. Do I need to complete 20 hours ofCPD each year? If not, how many CPD hoursmust I complete? How do I submit supportingdocumentsofmyCPDhoursifmostofmyCPDisunstructured?
A: The reporting period for the Continuing Professional Development (CPD) compliance is a period of 12 months commencing from 1 December each year and running to 30 November of the following year. Members must complete 20 hours of CPD per year. If members join in the middle of the year, the CPD requirements are imposed on a pro-rata basis. For example, if you joined the HKIAAT as a member in August, you are required to complete 6 hours of CPD from August to November 2007. Those who join in November are exempt from any CPD requirements for that year.
Upon the renewal of your membership each year, you are required to sign and submit a declaration that you have complied with the CPD requirements. The HKIAAT currently does not require members to submit supporting documents of their CPD activities, whether structured or unstructured. However, you are strongly advised to keep a register of your CPD activities for a personal record of your development.
Q: IjoinedtheHKIAATasafellowmemberearlierthisyear.IsthereanHKIAATmembershiplistwheremyemployercancheckthatIampartoftheHKIAATmembership?
A: The HKIAAT members’ list is available on the HKIAAT website at www.hkiaat.org/member/MemberSearch.php. You may search for members using their surname or given name. The members’ list also shows the status of your membership (Associate or Fellow).
Q: IamanHKIAATstudentandcompletedhalfofthepapersintheAccountingTechnicianExamination(ATE)twoyearsago:thenIstoppedmystudies.IknowthattheHKIAATisplanningtochangetoanewsyllabus.WillIhavetotakealltheATEpapersalloveragain?Havethesyllabuseschangedalot?WherecanIfindoutmoreinformationonthis?
A: The New Qualification Framework will be implemented in June 2009. Existing students of the HKIAAT are eligible for cross-credits, which means that you will have credit under the new HKIAAT paper for each existing ATE paper you have previously completed.
Past registered students who are no longer on the students’ register and have yet to complete the ATE will be entitled to the same cross-credits provided that they reinstate their studentship. More details will be announced in due course.
The syllabuses for the examinations (Accredited Accounting Technician Examination, Professional Assessment and Professional Bridging Examination) under the New Qualification Framework have been finalized and are now available on our website www.hkiaat.org/index.php/whatsnew/updates_on_the_hkiaat_new_qualification_framework/168.
Features
2�Hong Kong Financial Reporting Standards: HKAS 27 (Relevant to ATE Paper 7 – Advanced Accounting & PBE Paper I – Financial Reporting)
Lindy W W Yau ACA, FCCA, FAIA, FCPA and Morris Y M Kwok MPA, ACMA, CPA
HKAS 27 “Consolidated and Separate Financial Statements”
This article provides the definition of a subsidiary and some
conditions for exemption from consolidation. It also addresses
the basic consolidation procedures for the preparation
of consolidated financial statements and accounting for
investments in subsidiaries in separate financial statements.
Scope and definition
HKAS 27 applies to the preparation and presentation of
consolidated financial statements for a group of entities
under the control of a parent. HKAS 27 contains the following
definitions:
1. Parent: an entity that has one or more subsidiaries.
2. Subsidiary: an entity, including an unincorporated entity,
that is controlled by another entity (known as the parent).
One typical example of an unincorporated entity is
partnership.
3. Control: the power to govern the financial and operating
policies of an entity so as to obtain benefits from its
activities. For example, if the parent owns more than 50%
voting power of a subsidiary, control is presumed to exist.
Definition of a subsidiary
HKAS 27 focuses the concept of control on the definition
of a subsidiary. In other words, if company A controls more
than 50 percent of the voting power in B, B is a subsidiary of
A since A can exercise the power to govern B’s financial and
operating policies.
In addition, even if less than half of the voting rights are
acquired, it is still possible for control to exist where there is:
(1) power over more than half of the voting rights by virtue of
an agreement with other investors;
(2) power to govern the financial and operating policies of
the entity by law or an agreement;
(3) power to appoint or remove the majority of the members
of the board of directors; or
(4) power to cast the majority of votes at the board meeting
or equivalent governing bodies. For example, if A has 30%
of the voting shares in B and has a right to nominate three
out of five members of the board then B is a subsidiary of
Not a subsidiary
Power to cast the majority of votes at the board meeting?
No
Power to appoint or remove the majority
of directors?
No
Power to govern financial and
operating policies?
No
Obtain > �0% voting shares by virtue of agreement with other investors?
No
Control > �0% voting shares?
YES
YES
YES
YES
YES Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
No
Potential voting rights
HKAS 27 also discusses the effect of potential voting rights on the parent/subsidiary relationship. Potential voting rights are financial instruments like share warrants or options, debt or equity instruments that are convertible into ordinary shares in the future. For example, if A has the power to govern the financial and operating policies of B after exercising or converting these financial instruments, B is a subsidiary of A.
A since A controls the power to cast the majority of votes
at the board meeting.
Features
2� Example 1ABC Ltd owns 30 percent of the voting shares in XYZ Ltd and 10 percent of the convertible debentures issued from XYZ Ltd at the beginning of year one. If the convertible debentures were exercised, ABC Ltd would have an additional of 25 percent voting shares in XYZ Ltd. Is XYZ Ltd a subsidiary of ABC Ltd in year two if: (a) the convertible debentures are exercised in year one?(b) the convertible debentures are exercised in year
three?
(a) In this case, XYZ Ltd is a subsidiary of ABC Ltd in year two since the exercise of the convertible debentures in year one would give ABC Ltd 55 percent voting shares in year one .
(b) In this case, XYZ Ltd is not a subsidiary of ABC Ltd in year two since the exercise of the convertible debentures in year three would give ABC Ltd 55 percent voting shares only in year three.
Exemption from consolidation
HKAS 27 and section 124(1) of the Companies Ordinance require every parent company to present consolidated financial statements. In other words, all immediate parent companies in the group should prepare their own consolidated financial statements. An immediate parent company is a company which has a subsidiary but is also itself a subsidiary of another company. For example:
In the above example, company A and company B are both required to prepare consolidated financial statements since both companies are parent companies.
However, an immediate parent company is exempt from the requirement to prepare group accounts if it satisfies the
conditions specified under section 124(2) of Companies Ordinance and HKAS 27. The following table compares the conditions for exemption from consolidation:
No Conditions
Section 124(2) of the Companies Ordinance
HKAS 27
1. (a) The parent (i.e. B) is itself a wholly-owned subsidiary (i.e. of A) OR
P P
(b) The parent (i.e. B) is a partially-owned subsidiary of another entity (i.e. of A) and its other owners do not object the exemption.
N/A P
2. The parent’s (i.e. B’s) debt or equity instruments are not traded in a public market.
N/A P
3. The parent (i.e. B) did not file and is not in the process of filing its financial statements with regulatory organization.
N/A P
4. The ultimate (i.e. A) or intermediate parent of the parent produces consolidated financial statements available for public use that comply with Hong Kong Financial Reporting Standards (HKFRSs) or International Financial Reporting Standards (IFRSs).
N/A P
So section 124(2) permits a parent not to prepare group accounts only if the parent company is a wholly-owned subsidiary of another company at the end of its financial year. In other words, if a Hong Kong incorporated parent company is a wholly-owned subsidiary of another company, this parent company does not need to comply with the exemption criteria under HKAS 27.
C
BImmediate
parent company
AUltimate parent
company
80%
70%
Features
27Example 2Case 1A owns 100 percent of the ordinary shares of B and B owns 80 percent of the ordinary shares of C. All companies are incorporated in Hong Kong and listed in Hong Kong. A has prepared consolidated financial statements in accordance with HKFRSs.
In this case, B can apply for exemption from consolidation under the Companies Ordinance since B is a Hong Kong incorporated company and is a wholly-owned subsidiary of A and so satisfies the exemption requirement under section 124(2) of the Companies Ordinance. The exemption criteria under HKAS 27 do not apply in this case.
Case 2Same information as in Case 1 except that B is incorporated in the US.
In this case, B cannot apply for an exemption from consolidation under the Companies Ordinance since B is not a Hong Kong incorporated company. Instead, B can apply for an exemption from consolidation under HKAS 27. As B satisfies all the exemption conditions under HKAS 27, B needs not prepare consolidated financial statements.
Case 3A owns 80 percent of the ordinary shares of B and B owns 70 percent of the ordinary shares of C. A and C are incorporated in Hong Kong but B is not. A has prepared consolidated financial statements in accordance with HKFRSs. B is not a listed company and the other owners in B do not object to the exemption from consolidation.
HKAS 27 also requires that if the immediate parent company (i.e. B) satisfies the exemption criteria and elects not to present consolidated financial statements, the company (i.e. B) should present its own separate financial statements.
Exclusion of subsidiaries from consolidation
HKAS 27 states that all subsidiaries should be consolidated except where on acquisition a subsidiary meets the criteria to be classified as held for sale. The criteria include:
(1) The subsidiary must be available for immediate sale in
its present condition. In other words, the sale should be
completed within a year.
(2) Its sale must be highly probable. For the sale to be highly
probable, management must be committed to sell the
subsidiaries and must be actively looking for a buyer.
If the above conditions are met, the subsidiary does not
have to be consolidated and it should be accounted for in
accordance with HKFRS 5 “Non-current Assets held for Sale
and Discontinued Operations”.
However, a subsidiary cannot be excluded from consolidation
because of the following reasons:
(1) the investor is a venture capital organization, mutual fund,
unit trust or similar entity; or
(2) its business activities are dissimilar from those of other
entities within a group.
Reporting dates and accounting policies
According to HKAS 27, all companies in the group should have same financial year-end as the parent. If the reporting date is different, adjustments should be made for the effects of significant transactions or events that occur between that date and the date of the parent’s financial statements. For example, A, the parent whose financial year-end is 31 March,
In this case, B can only apply for exemption from consolidation under HKAS 27. Since B is not incorporated in Hong Kong it does not meet the section 124(2) requirements; however it does meet all four conditions for exemption under HKAS 27.
A
100%
B
80%
C
A
100%
B
80%
C
A
80%
B
70%
C
Features
28has a subsidiary B whose financial year-end is 31 December. A should adjust B’s financial statements by including transactions occurred between January to March.
In addition, HKAS 27 also requires uniform accounting policies for like transactions and other events in similar circumstances in all the companies within the group. If the accounting policies are not the same, appropriate adjustments should be made in the consolidated financial statements.
Consolidation procedures
The basic principle for preparation of consolidated financial statements is to combine the like items of assets, liabilities, equity, income and expenses of the parent and its subsidiaries after certain consolidation adjustments like intra-group balances and dividends and unrealized profit on inventory. The consolidation adjustments required will vary with different circumstances but basically follow these steps:
ExplanationStep
Establish the group structure
If A buys 13,000 shares out of B’s total of 20,000 shares, A
owns 65% of B
Eliminate inter-company transactions and balances
Intra-group dividends and sales, intra-group balances
Determine goodwill on acquisition
Goodwill = cost of investment – parent’s portion of net
assets of subsidiary
Calculate the minority interest
Minority interest = minority interest’s portion of net assets
of subsidiary
Compute consolidated profit and loss
Parent’s portion of adjusted post-acquisition profits
Prepare consolidated balance sheet
Parent and subsidiary assets and liabilities after elimination of inter-
company transactions and balances
Example 3
The balance sheets of parent P and subsidiary S at 31 December 2008 are as follows:
P S
$000 $000
Fixed assets 180 130
Investment in S 70 -
Current account with S 80 -
Trade receivables 20 15
Cash and bank 10 25
360 170
Ordinary shares ($1 shares) 220 50
Retained earnings 70 20
Current account with P - 60
Trade payables 15 10
Accrued expenses 5 -
Proposed dividend 50 30
360 170
Additional information:
(a) P acquired 30,000 shares in S on 1 May 2008, when S’s retained earnings were $10,000.
(b) On 29 December 2008, S sent a cheque to P for $20,000 but this was not received by P until 2 January 2009.
(c) The proposed dividends are declared and approved by P and S on 12 March 2009 and 14 March 2009 respectively. P has not included any entries in its accounts relating to the dividend receivable from S.
Required:Prepare the consolidated balance sheet at 31 December 2008.
Step 1 Establish group structure
P acquires 30,000 shares of S’s total of 50,000 shares. Therefore P owns 60% (30,000/50,000) of S.
Step 2 Eliminate inter-company transaction and balances
$000
Per current account with S 80
Less: cash in transit 20
Cur rent account w i th S a f te r adjustment
60
Agreed with current account with P 60
Features
2�The journal entries will be: $000 $000
(1) Dr Cash in transit 20
Cr Current account with S 20
Being adjustment of cash in transit.
(2) Dr Current account with P 60
Cr Current account with S 60
Being elimination of intercompany current account.
Step 3 Determine goodwill on acquisition $000
Cost of investment in S 70
Less: P’s share of net assets at acquisition date
Share capital (50 x 60%) 30
Retained profit (10 x 60%) 6
36
Goodwill on acquisition 34
Step 4 Calculate minority interest $000
Share capital (50 x 40%) 20
Retained earnings (20 x 40%) 8
Proposed dividend payable tominority interest (30 x 40%) 12
40
Step 5 Compute consolidated profit and loss
$000
P: Retained earnings 70
Add: adjustment of dividend received from S (30 x 60%) 18
S: P’s share of S’s post acquisition profits [(20-10) x 60%] 6
94
Step 6 Prepare consolidated balance sheet
P Group: Consolidated balance sheet at 31 December 2008
$000
Assets
Non current assets
Property, plant and equipment (180+130) 310
Goodwill 34
344
Current assets
Trade receivables (20+15) 35
Cash and cash equivalents (10+25+20) 55
90
Total assets 434
$000
Equity and liabilities
Equity attributable to equity holders of the parent
Share capital 220
Retained earnings 94
Proposed dividend* 50
364
Minority interest 40
Total equity 404
Current liabilities
Trade and other payables (15+5+10) 30
30
Total equity and liabilities 434
* If dividends are proposed after the balance sheet date, some listed companies, in practice, will present proposed dividends as a separate component of shareholders’ equity but this presentation is not required under HKAS 10. Instead, HKAS 10 only allows for these dividends to be disclosed in the notes to the financial statements.
Features
�0Accounting for investments in separate financial statementsHKAS 27 allows two treatments for investment in subsidiaries in the books of parent company. The following summarizes these two treatments:
Situation Accounting treatment
(1) If the investment in subsidiaries is classified as held for sale
The investment in subsidiaries should be reclassified as non-current assets held for sale and measured at the lower of the carrying amount and fair value less cost to sell in accordance with HKFRS 5.
(2) If the investment in subsidiaries is not classified as held for sale
The investment in subsidiaries should be accounted for either at cost or in accordance with HKAS 39.
Example 4Suppose A acquires 80 percent of the shares in B for $100,000 on 1 January 2008 when the fair value of B’s net assets is $110,000. The fair value less cost to sell for this investment at 31 December 2008 is $90,000.
(a) What is the value of the investment in B if this investment is classified as held for sale on 31 December 2008?
(b) What is the value of investment in B if this investment is not classified as held for sale on 31 December 2008? (Assume A uses the cost method to account for its investment in subsidiaries.)
(a) If the investment in B is classified as held for sale, this investment should be valued at the lower of the carrying amount and fair value less cost to sell. Therefore the investment in B at 31 December 2008 is $90,000 in A’s books.
(b) If the investment in B is not classified as held for sale, this investment should be accounted for either at cost or in accordance with HKAS 39. Therefore, the investment in B at 31 December 2008 is still $100,000 in A’s books.
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