PUBLIC PRACTICE PATHWAYS GUIDE:

Transcription

1 PUBLIC PRACTICE PATHWAYS GUIDE: HONG KONG INTRODUCTION This guide gives you an overview of the requirements to practise as an accountant in Hong Kong. Broadly, we cover the regulatory environment in Hong Kong and discuss registration requirements for accountants to obtain a practising certificate. This material is intended to be an introduction to the requirements only. Members are responsible for ensuring they are aware of, and comply with, all regulators requirements in the countries in which they work. This material is aimed at CPA Australia members who do not provide public accounting services into Australia or New Zealand; who are interested in public practice; and who are based outside of Australia or New Zealand. CPA Australia members who provide public accounting services into Australia or New Zealand and earn more than $10,000 gross in fees each calendar year must hold a Public Practice Certificate. This requirement applies to all members, no matter where in the world they are located. AUTHOR Dr Sebastian Bombaci Dr Bombaci is a senior business development professional. For the last 10 years his focus has been on the establishment and development of new business channels, primarily in the financial services and the IT&T industries (with experience in Hong Kong, China and Singapore, and exposure to Indonesia and Malaysia). He is currently a council member of CPA Australia s Greater China Division. He was also the Chairman of the Business Management Committee (BMC) of the Greater China Division and was a member of the HKICPA Accountancy Accreditation Board for four years. The role of the BMC is to play a leading role in Hong Kong in identifying, researching and disseminating information to the community, CPA Australia members and the Hong Kong Special Administration Region Government on key issues that are of concern to business and the community.

2 CONTENTS Introduction to the accounting profession in Hong Kong 3 CPA Australia members working in Hong Kong and China 3 Obtaining a HKICPA Practising Certificate 4 Issuance requirements 4 Hong Kong residence 4 Work experience requirements for Hong Kong public practice 5 Application forms 6 Registration of a firm or corporate practice in Hong Kong 6 Becoming a member of the HKICPA 7 HKICPA Professional Practice Examinations 7 Ongoing requirements for holders of a HKICPA Practising Certificate 8 Designations 8 Annual renewal requirements for the issue of a HKICPA Practising Certificate 8 HKICPA Practice Review 9 HKICPA Professional Standards Monitoring 9 HKICPA Continuing Professional Development 9 Professional indemnity for public practices in Hong Kong 9 Financial Reporting Council in Hong Kong 10 Hong Kong organisations recognising the CPA Australia qualification for their entry requirements 10 Hong Kong Institute of Chartered Secretaries 10 Certified Financial Planner 10 Hong Kong organisations only recognising the HKICPA qualification for their requirements 11 Securities and Futures Commission 11 Appendices 11 Appendix 1: Chapter 50, Section 29A Requirements for issue of a HKICPA Practising Certificate 11 Appendix 2: Chapter 50, Sections 28A to 28C Registration of a firm name 12 Appendix 3: Chapter 50A, By-Laws 28 and

3 INTRODUCTION TO THE ACCOUNTING PROFESSION IN HONG KONG The Hong Kong Special Administration Region s (HKSAR) landscape for the accounting profession is both simpler and more complex than found in Australia. The Hong Kong Institute of Certified Public Accountants (HKICPA) is the single statutory licensing body for accountants in the HKSAR. HKICPA is responsible for: registering accountants and issuing HKICPA Practising Certificates in Hong Kong regulating the professional conduct and standards for members setting codes of ethics and standards of accounting and auditing regulating the quality of entry to the profession through its qualification program and related courses providing continuing education and other services to members promoting the Hong Kong accountancy profession both in Hong Kong and overseas. HKICPA s legal mandate to regulate the accounting environment in Hong Kong is based on legislation called the Professional Accountants Ordinance 1 (Chapter 50) and the Professional Accountants By-Laws (Chapter 50A). A full listing of legislation for Hong Kong can be found at < or Due to its legal status, HKICPA has several representatives from the HKSAR Government and four governmentappointed lay members sitting on its governing body, the HKICPA Council. Conversely, the accounting profession plays a part in the HKSAR s legislative environment, with an accountant represented in the Legislative Council (the HKSAR Government s legislature) sitting in the Accountancy Functional Constituency seat. Mr. Kenneth Leung is the current member. Also of importance to the accounting profession is the legislation covering the operation of companies in the HKSAR known as the Companies Ordinance (Chapter 622, which came into force in March 2014). This ordinance outlines the types of business entities that can operate under a company structure, the various options available to them in terms of their legal liabilities, and their financial reporting requirements. Other relevant legislation includes the Business Registration Ordinance Chapter 310, the Limited Partnerships Ordinance Chapter 37, and the Partnership Ordinance Chapter 38. While there are many interest groups in Hong Kong which are associated with the accounting profession, and many of these provide input (both solicited and unsolicited) to both the HKICPA and the HKSAR Government, it should be stressed that none of these groups, except some of the Government departments, have a legal mandate. CPA AUSTRALIA MEMBERS WORKING IN HONG KONG AND CHINA A common foundation based on English legal principles between Hong Kong s and Australia s business, commercial and legal environments is well suited to CPA Australia members, who are eagerly sought by Hong Kong employers. CPA Australia members can work in a diverse range of auditing, accounting, financial services and corporate positions in all levels of management, including senior managers and company directors. For these positions there is no need for CPA Australia members to join the local accounting body as their CPA Australia qualifications and Australian work experience are both readily and widely accepted in Hong Kong. 1 The word Ordinance is equivalent to the word Act in Australia that is used to designate government legislation. 3

4 OBTAINING A HKICPA PRACTISING CERTIFICATE Issuance requirements The issue of a HKICPA Practising Certificate is governed specifically under section 29A of Chapter 50 of the Professional Accountants Ordinance (provided in Appendix 1). The specific application requirements under the ordinance that must be met before a HKICPA Practising Certificate may be issued include that the applicant must: be a member 2 of the HKICPA or in the process of applying to become a member meet a minimum professional work experience requirement, of 48 months, and at least one year of that work experience must have been gained post-qualifying. This may be reduced to 30 months if the working experience is all gained post-qualifying (See the Work experience requirements section below for further details) have gained this experience whilst in the employ of an appropriate employer (see below for further details) have at least 75% of the approved accounting experience in auditing have gained at least one year of such full time experience in audit in public practice in Hong Kong within the three years prior to the date of the application for a HKICPA Practising Certificate be a resident of Hong Kong have passed (where applicable) examinations in Hong Kong local law, taxation and auditing have completed the relevant CPD requirements. Other requirements that must be met before a HKICPA Practising Certificate may be issued (Form R-4, Application For The Issue of A Practising Certificate, obtainable from the HKICPA) include the following: a HKICPA Practising Certificate shall not be issued to an applicant if there is in force against him an order of the Disciplinary Committee under section 35(1)(db) to that effect Section 30(7) of the Professional Accountants Ordinance stipulates that A HKICPA Practising Certificate shall not be issued to, and the HKICPA Council may cancel the HKICPA Practising Certificate of, a certified public accountant who is or has become bankrupt or has entered into a voluntary arrangement with his creditors within the meaning of the Bankruptcy Ordinance (Chapter 6) a certified public accountant, after his/her registration as such, convicted of an offence involving fraud or dishonesty locally or overseas, or found guilty of professional misconduct by an overseas professional institute, should notify the Registrar of such conviction or findings as soon as practicable. Hong Kong residence Section 29A (2a) of the Professional Accountants Ordinance states that a HKICPA Practising Certificate shall not be issued to an applicant unless he satisfies the HKICPA Council that he is ordinarily resident in Hong Kong. Section 29A 5(b) further defines that a person shall be treated as ordinarily resident if he has been present in Hong Kong for not less than 180 days in the preceding 12 months. Additional residency options are detailed in the application form (Form R-4) from the HKICPA where: (b) (i) s/he claims to be ordinarily resident in Hong Kong because s/he is presently residing in Hong Kong and intends to reside in Hong Kong for the next 12 months AND (b) (ii) s/he has the right of abode in Hong Kong or the right to land in Hong Kong and not to have imposed on him/her any condition of stay; OR s/he has been residing in Hong Kong for a considerable length of time OR 2 The minimum status of membership must be that of a Certified Public Accountant as defined under sections 2 and 24 of the Professional Accountants Ordinance. 4

5 (c) (i) s/he claims to be ordinarily resident in Hong Kong because s/he is working in P.R. China and continues to be a partner/director/employee of a CPA firm/corporate practice registered with the Institute, AND has the right of abode in Hong Kong or the right to land in Hong Kong and not to have imposed on him/her any condition of stay AND (c) (ii) s/he continues to maintain a place of residence in Hong Kong; OR the principal member or members of his/her family (spouse and/or minor children) has or have been present in Hong Kong for not less than 180 days during the period of 12 months preceding the date of his/her application. Work experience requirements for Hong Kong public practice As described above, a CPA (HKICPA designation) may apply for a HKICPA Practising Certificate if they have had a period of not less than four years of full-time continuous approved accounting experience of which at least one year is post-qualifying experience. For accountants living and working in Hong Kong the experience must have been gained in the office of a practising certificate (PC) holder or a CPA practice in Hong Kong. Where experience has been gained outside of Hong Kong the experience will be assessed in accordance with the policy on approved accounting experience prescribed by the HKICPA Council 3. The four-year period may be reduced to 30 months if the experience acquired is all post qualifying. The 30 months full-time work experience must have been gained after the applicant: becomes a member of an accountancy body with which there is in force an agreement of mutual or reciprocal recognition between the accountancy body and the HKICPA OR becomes a member of an accountancy body accepted by the HKICPA Council under section 24(1A) of the Professional Accountants Ordinance OR registers as a certified public accountant (with HKICPA). Where the work experience is a mix of pre- and post-qualification experience, the applicant must complete four years of full-time approved accounting experience (with at least one year being post-qualification experience) in an office or offices of: a certified public accountant holding a HKICPA Practising Certificate issued under the Professional Accountants Ordinance OR a person practising public accountancy under the jurisdiction of an accountancy body with which there is in force an agreement of mutual or reciprocal recognition between the accountancy body and the Institute OR an accountancy body accepted by the HKICPA Council under section 24(1A) of the Professional Accountants Ordinance. 3 < 5

6 HKICPA also places restrictions on the number of employers within the required length of full-time experience in public practice. The respective requirements are: Minimum length of fulltime experience for PC Maximum number of employments Maximum number of employments which are less than 12 months each Experience comprising preand post-qualifying experience 4 years 5 2 All experience is postqualifying 30 months 4 2 For CPA Australia members where the acquired experience was outside of Hong Kong and Mainland China the practical experience, of which 75% must be in auditing, must have been acquired in the office of a person practising public accountancy under the jurisdiction of CPA Australia (CPAA) will be recognized in accordance with the terms of the mutual recognition agreement (MRA). Such experience will be accepted only if it has been gained: under an Authorized Employer or Authorized Supervisor complying with the Institute's Practical Experience Framework requirement OR from a training organization accredited by a reciprocal membership agreement (RMA) body. Section 24(1A) of the Professional Accountants Ordinance states that the HKICPA Council may grant exemptions in whole or in part from the requirements of subsection (1)(c)(i), including exemption from the requirement of registration as a student of the Institute to a person who is a member of an accountancy body accepted by the HKICPA Council by resolution approved by two-thirds of its members as being of a standard similar to that of the Institute. Application forms The application process for a HKICPA Practising Certificate requires the submission of a number of documents and forms. The forms vary by each individual s circumstances. Care should be taken to ensure that all appropriate documents are supplied in the correct format, which is normally an original or a certified true copy. Some of the forms include: HKICPA Application for the Issue of a Practising Certificate (Form R-4), available on the website Character References Pro-forma for Testimonial, used for testimonials from past and present employers certifying your employment period, position held, specific job nature and percentage of audit involvement Examination Results for Professional Examinations Examination Results for HKICPA Practising Certificate Examinations Membership Certificate. Registration of a firm or corporate practice in Hong Kong Firm Sole proprietor or in partnership The registration of a firm of certified public accountants (practising) is governed by sections 28A to 28C (see Appendix 2) of the Professional Accountants Ordinance and Professional Accountants By-laws 28 and 29 (see Appendix 3). A Certified Public Accountant ( CPA ) holding a HKICPA Practising Certificate who wishes to practise under a firm name, as a sole proprietor or in partnership with other CPA(s), must apply to the HKICPA Council for registration of the firm name. 6

7 The registration of a firm will end on 31 December each year. An application for renewal of registration shall be made to the Registrar of the HKICPA not later than 15 December in the year preceding the year of renewal in such form as the HKICPA Council may specify. Renewal of firm registration shall not be granted except on payment of the registration fee fixed by the HKICPA Council. The above is only a brief introduction for firm registration. For more details, please download an application form RF-1 from the HKICPA website. Corporate practice The registration of a corporate practice is governed by: sections 28D to 28H of the Professional Accountants Ordinance Professional Accountants By-laws 28 and 29 (provided in Appendix 3) a set of subsidiary rules o the Corporate Practices (Registration) Rules o the Corporate Practices (Model Articles of Association) o the Corporate Practices (Professional Indemnity) Rules. A corporate applicant may be granted registration only if: it is a qualified company it satisfies all the requirements in relation to directors/shareholders the Memorandum and Articles of Association ( M&A ) of the corporate applicant comply substantially with the terms of relevant provisions of the Model M&A issued by the Institute as part of its rules on incorporation it complies with all the requirements in relation to professional indemnity insurance. A Certified Public Accountant ( CPA ) holding a HKICPA Practising Certificate who wishes to practise under a corporate practice name must apply to the HKICPA Council for registration of the corporate practice name. The above is only a brief introduction for registration of a corporate practice. For more details, please download the application forms RCP-1A and 1B and the subsidiary rules from the HKICPA website. Becoming a member of the HKICPA Full members of CPA Australia may also become members of HKICPA as long as they fulfil the terms of the Mutual Recognition Agreement (MRA) between CPA Australia and HKICPA. This agreement became effective on 1 July Transitional arrangements exist for Associate members of CPA Australia admitted before this date. For updated details on the MRA, interested parties should contact the CPA Australia Greater China Division in Hong Kong. Contact details can be found either on the CPA Australia website or on the HKICPA website. HKICPA Professional Practice Examinations Section 29A (3) of the Professional Accountants Ordinance details that: the Council may require an applicant to sit such examinations as it may prescribe which shall include an examination in local law and taxation, and may require an applicant to have had not less than 1 year full time approved accounting experience in Hong Kong. The HKICPA Council has ruled that an applicant for a HKICPA Practising Certificate is required to satisfy a number of examination requirements. Full members of CPA Australia (i.e. those who have attained the status of CPA by sitting and passing the CPA Australia CPA Program segments) are eligible to sit the HKICPA Practising Certificate (PC) examinations even though they are not already members of HKICPA. 7

8 For full members of CPA Australia: those that have sat and passed the audit paper in the CPA Australia CPA Program professional level examinations are required to sit the (HKICPA) PC-Law and (HKICPA) PC-Taxation papers those that have NOT sat and passed the audit paper in the CPA Australia CPA Program professional level examinations are required to sit the (HKICPA) PC Business Assurance, (HKICPA) PC Law and (HKICPA) PC- Taxation papers It should be noted that members of CPA Australia that have been admitted as a CPA of the HKICPA by virtue of their membership with CPA Australia are also required to sit the HKICPA Practising Certificate examinations. As with the earlier two points, those applicants that have: already passed the audit paper in the CPA Australia CPA Program professional level examinations are not required to take the (HKICPA) PC-Business Assurance paper, but must take the other two papers not passed the audit paper in the CPA Australia CPA Program professional level examinations are required to take all three papers. Candidates for the HKICPA PC examinations may choose to sit any number of papers at one examination sitting. The HKICPA Council rules that subject-by-subject passes are allowed and that there is no time limit restricting the validity of such passes. The examination for each HKICPA PC paper lasts for three hours in an open-book format. All answers must be presented in English. Each HKICPA PC paper is divided into two sections and the marks are allocated 50 per cent for a Case Study and 50 per cent for Essay and Short Answer Questions. It is worth noting that: acceptance of an entry to the HKICPA Practising Certificate examinations does not imply that the applicant qualifies for HKICPA membership and/or issuance of a HKICPA PC CPA Australia members who are interested in also becoming members of HKICPA must satisfy the examination and other admission/issuance requirements prevailing at the time for HKICPA candidates are required to take the HKICPA PC examinations in Hong Kong. ONGOING REQUIREMENTS FOR HOLDERS OF A HKICPA PRACTISING CERTIFICATE Designations CPA Under By-law 22, Chapter 50A of the Professional Accountants By-laws: a member of the Hong Kong Institute of Certified Public Accountants shall use the designation Certified Public Accountant ( 會計師 ) and the initials CPA after his/her name after advancement to fellowship, a Certified Public Accountant shall use the designation Fellow of the Hong Kong Institute of Certified Public Accountants ( 資深會計師 ) and the initials FCPA after his/her name. CPA Practising Under By-law 25, Chapter 50A of the Professional Accountants By-laws: 1) a certified public accountant holding a HKICPA Practising Certificate may describe himself as a Certified Public Accountant ( 會計師 ) or a Certified Public Accountant (Practising) ( 執業會計師 ) and use the initials CPA or CPA (Practising). 8

9 2) a firm registered under sections 28B and 28C of the Ordinance or a corporate practice registered under sections 28D(4) and 28E of the Ordinance may describe itself as Certified Public Accountants or Certified Public Accountants (Practising) or in Chinese 會計師事務所 or 會計師行. Annual renewal requirements for the issue of a HKICPA Practising Certificate There are a number of annual renewal requirements for holders of a HKICPA Practising Certificate: HKICPA Practising Certificates must be renewed annually the applicant must also continue to satisfy the Hong Kong residence requirements along with the renewal, HKICPA Practising Certificate holders are required to complete a number of declarations: o compliance with continuing professional development requirements in accordance with Statement Continuing Professional Development in the HKICPA Members Handbook o a declaration for the re-application of a HKICPA Practising Certificate. There are a number of restrictions that would preclude the HKICPA from issuing or re issuing a HKICPA Practising Certificate, including: the certified public accountant has become bankrupt the certified public accountant has entered into a voluntary arrangement within the meaning of the Bankruptcy Ordinance (Chapter 6) OR the holder of a HKICPA Practising Certificate fails to return the duly completed declarations. There are some additional requirements for the renewal of a corporate practice, including: a declaration to confirm compliance with the shareholding requirements for the renewal of a multi-practising member corporate practice (Rule 4) a declaration to confirm compliance with the Corporate Practices (Registration) and (Professional Indemnity) Rules requirements for the renewal of a corporate practice (Rule 14). HKICPA Practice Review All Certified Public Accountants (Practising) in Hong Kong, whether practising in their own name, in the name of a firm or in the name of a corporate practice, are subject to HKICPA Practice Review (Hong Kong Standard on Quality Control 1). The main principles of the HKICPA Practice Review program include: using a risk-based approach for the selection of practice units for reviews risk being defined as the ability for the practice to address, amongst other things, environmental risk. A questionnaire must be completed annually by all practice units, and it collects information about: organization and management quality control policies and procedures client profile. In addition practices with listed entity client(s) will be visited at least once every three years however the frequency is based on potential risk faced by the practice. The statutory requirements of the public HKICPA Practice Reviews are covered under Part IVA of the Professional Accountants Ordinance, sections 32A to 32H. Under the ordinance, the HKICPA Council may: specify the particular professional standards in relation to the review issue directions to the HKICPA Practice Review Committee requiring a review appoint any HKICPA Certified Public Accountant for the purpose of carrying out HKICPA Practice Reviews. 9

10 HKICPA Professional Standards Monitoring The HKICPA Professional Standards Monitoring Expert Panel (PSM) reviews published audited financial statements of Hong Kong-listed companies to monitor the compliance of accounting and auditing standards by the HKICPA members in public practice. Selected financial statements are submitted to the PSMC for review and determination of any action required on areas of non-compliance noted in the selected financial statements. HKICPA Continuing Professional Development All HKICPA members are required to complete at least 120 hours of Continuing Professional Development (CPD) hours over a three-year rolling period. Sixty hours of the CPD must be verifiable for example, conference attendance and committee meetings and a minimum of 20 hours of the 120 hours must be completed each year (Statement Continuing Professional Development ). These requirements are similar to the CPD requirements for members of CPA Australia. Professional indemnity for public practices in Hong Kong Under the Corporate Practices (Professional Indemnity) Rules, each corporate practice must have professional indemnity insurance under the Professional Indemnity Insurance Master Policy of the HKICPA. The Master Policy is primarily designed to protect the corporate practices against legal liability arising from professional negligence, errors or omissions, including libel and slander. Financial Reporting Council in Hong Kong In July 2006, Hong Kong s Legislative Council passed the relevant bill to establish the Financial Reporting Council (FRC) with statutory powers to investigate auditing irregularities and accounting non-compliances of listed companies and collective investment schemes in Hong Kong (Chapter 588). The establishment of the FRC is designed to enhance the confidence of investors through better corporate governance and improving market quality. The FRC became fully operational as of 16 July 2007 and the current Chairman is Dr. John Poon. In the near future the FRC will take a greater independent role in auditor oversight in Hong Kong. HONG KONG ORGANISATIONS RECOGNISING THE CPA AUSTRALIA QUALIFICATION FOR THEIR ENTRY REQUIREMENTS Hong Kong Institute of Chartered Secretaries The Hong Kong Institute of Chartered Secretaries (HKICS) is targeted towards providing an education pathway for company secretaries and administrators. It targets degree holders and people with equivalent professional qualifications as its members. The membership standard meets the criteria set by the Institute of Chartered Secretaries & Administrators (ICSA) so that membership of HKICS automatically enables the award of membership of the ICSA. The HKICS offers up to a maximum of four exemptions from the eight papers of the Professional Programme Part I and II for holders of relevant bachelor degrees, postgraduate diplomas, masters degrees or professional qualifications (i.e. in accounting, finance, law or management) from recognized universities or professional bodies. Accounting professionals (which includes CPA Australia members who have obtained the CPA qualification by examination) are granted exemptions from the following papers: Strategic and Operations Management Hong Kong Financial Accounting Hong Kong Taxation Corporate Financial Management. 10

11 Certified Financial Planner The Institute of Financial Planners of Hong Kong (IFPHK) offers the Certified Financial Planner (CFP) certification, aimed at providing an internationally recognized financial planning designation. The accreditation pathway allows for candidates with specific professional credentials to fulfil the education requirement for CFP CM certification. The Certified Practising Accountant (CPA/FCPA) (Australia) designation is one of the approved professional designations, and holders of this designation are eligible to sit for the CFP CM Certification Examination, Level 1. This means that the holder of a CPA designation has fulfilled the minimum educational requirements and can take the CFP CM Certification Examination directly. Note that IFPHK has advised that CPA Australia Certified Practising Accountants are also eligible for the exemption. Note that candidates still must meet work experience requirements. HONG KONG ORGANISATIONS ONLY RECOGNISING THE HKICPA QUALIFICATION FOR THEIR REQUIREMENTS Securities and Futures Commission The Securities and Futures Commission (SFC) is an independent non-governmental statutory body responsible for regulating the securities and futures markets in Hong Kong. Schedule five of the Securities and Futures Ordinance (Chapter 571) stipulates ten types of regulated activity and provides a detailed definition for each of them. These activities are: Type 1 Dealing in securities Type 2 Dealing in futures contracts Type 3 Leveraged foreign exchange trading Type 4 Advising on securities Type 5 Advising on futures contracts Type 6 Advising on corporate finance Type 7 Providing automated trading services Type 8 Securities margin financing Type 9 Asset management Type 10 Providing credit rating services. Persons conducting business in regulated activities are generally required to be licensed or registered with the SFC. A solicitor, counsel or a professional accountant is not required to be licensed for Type 4, Type 5, Type 6 or Type 9 regulated activity if the advice or services provided are wholly incidental to the practice as a solicitor, a counsel or a professional accountant. Note that the definition of the Certified Public Accountant is based on the requirements of the Professional Accountants Ordinance. As such, only those accountants who are members of HKICPA are eligible for this relaxation of the requirements for those regulated activities. Additional information can also be obtained from the Hong Kong Securities Institute and the Licensing Examination for Securities and Futures Intermediaries Examination Handbook, which is available from the website. 11

12 APPENDICES Appendix 1: Chapter 50, Section 29A Requirements for issue of a HKICPA Practising Certificate Chapter: 50 Title: PROFESSIONAL ACCOUNTANTS ORDINANCE Gazette Number: 23 of 2004 Version Date: 08/09/2004 (1) Subject to subsections (1A), (1B) and (2), a HKICPA Practising Certificate shall not be issued to a certified public accountant unless the HKICPA Council is satisfied that he (a) has, after becoming a member of an accountancy body with which there is in force an agreement of mutual or reciprocal recognition between the accountancy body and the Institute, or after becoming a member of an accountancy body accepted by the HKICPA Council under section 24(1A), or after registration as a certified public accountant, had not less than a total of 30 months full time approved accounting experience in the office of (1A) (1B) (i) a certified public accountant holding a HKICPA Practising Certificate issued under this Ordinance; or (ii) a person practising public accountancy under the jurisdiction of an accountancy body with which there is in force an agreement of mutual or reciprocal recognition between the accountancy body and the Institute, or an accountancy body accepted by the HKICPA Council under section 24(1A); or (b) has had a period of not less than 4 years full time approved accounting experience in an office or offices referred to in subparagraph (i) or (ii) of paragraph (a) or any combination thereof of which at least 1 year shall have been acquired after he has become a member of an accountancy body with which there is in force an agreement of mutual or reciprocal recognition between the accountancy body and the Institute, or an accountancy body accepted by the HKICPA Council under section 24(1A) or after his registration as a certified public accountant. For the purpose of subsection (1) the HKICPA Council may require the whole or any part of the 30 months of full time accounting experience under subsection (1)(a) or the 4 years of full time accounting experience under subsection (1)(b) to have been acquired within such period preceding the application for a HKICPA Practising Certificate as may from time to time be specified by the HKICPA Council. A HKICPA Practising Certificate shall not be issued to an applicant if there is in force against him an order of the HKICPA Disciplinary Committee under section 35(1)(db) to that effect. (2) A HKICPA Practising Certificate shall not be issued to an applicant unless he satisfies the HKICPA Council that he (a) is ordinarily resident in Hong Kong; and (b) possesses such local experience and knowledge of local law and practice as the HKICPA Council may consider necessary. (3) For the purposes of subsection (2)(b) the HKICPA Council may require an applicant to sit such examinations as it may prescribe which shall include an examination in local law and taxation, and may require an applicant to have had not less than 1 year full time approved accounting experience in Hong Kong. 12

13 (4) If the HKICPA Council considers that an applicant has acquired substantial experience in accountancy, either in Hong Kong or elsewhere over a considerable period of time the HKICPA Council may dispense with the requirements of subsection (2). (5) For the purposes of this section (a) approved accounting experience ( 認可會計經驗 ) means such professional accountancy experience as the HKICPA Council may approve from time to time as sufficient practical experience; and (b) a person shall be treated as ordinarily resident if he has been present in Hong Kong for not less than 180 days in the preceding 12 months. Appendix 2: Chapter 50, Sections 28A to 28C Registration of a firm name Chapter: 50 Title: PROFESSIONAL ACCOUNTANTS ORDINANCE Gazette Number: 23 of 2004 Version Date: 08/09/2004 Section Number 28A Registration of a firm name (1) A certified public accountant (practising) practising on his own account under a firm name shall apply to the HKICPA Council for registration of the firm name under this Ordinance. (2) A firm of certified public accountants (practising) shall apply to the HKICPA Council for registration of a firm name under this Ordinance. (3) No person shall practise (a) on his own account as a certified public accountant (practising) under a firm name; or (b) in partnership as a firm of certified public accountants (practising), unless his firm name or, as the case may be, the firm in which he is a partner is registered under this Ordinance. (4) The HKICPA Council may reject an application under subsection (1) or (2) if the firm name proposed to be registered (a) is the same as a firm name already registered; (b) so nearly resembles a firm name already registered as to be likely to cause confusion; or (c) is, in the opinion of the HKICPA Council, misleading, offensive or otherwise contrary to the public interest. (5) A firm of certified public accountants (practising) shall not be qualified to be registered under subsection (2) unless all partners of the firm are certified public accountants and at least such proportion as the HKICPA Council may from time to time prescribe of its partners is or are certified public accountant (practising) or certified public accountants (practising). (6) For the avoidance of doubt, it is hereby declared that a person other than the holder of a current HKICPA Practising Certificate shall not be entitled to sign an audit report on behalf of a firm of certified public accountants (practising). Section Number 28B Application for registration of a firm Application for registration of a firm of certified public accountants (practising) under this Ordinance shall be made to the HKICPA Council in such form as the HKICPA Council may specify and there shall be lodged with the application such registration fee as may be fixed by the HKICPA Council. 13

14 Section Number 28C Application for registration of a firm The provisions of sections 22, 23, 26, 27(1)(a)(iii) and (iv), (2), (3), (4), (5) and (6), 28, 39 and 41(1)(a) and (b)(i) shall apply mutatis mutandis in relation to the registration of a firm and a firm name as they apply in relation to the registration of a certified public accountant. Appendix 3: Chapter 50A, By-Laws 28 and 29 Chapter: 50A Title: PROFESSIONAL ACCOUNTANTS BY-LAWS Version Date: 10/04/2014 By-law 28 Certified public accountants not to practise with or employ certain persons Save with the approval in writing of the Council, a certified public accountant holding a Practising Certificate who knowingly (23 of 2004 s.55) (a) (b) (c) permits his name to be made use of in connection with the practice of public accountancy by a person who is not a certified public accountant holding a Practising Certificate; (23 of 2004 s.55) employs, in or in connection with his practice as an accountant, a person whose name has been removed from the register under section 35(1)(a) of the Ordinance and has not been restored thereto; or practises in partnership or through a corporate practice as an accountant with a person who is not entitled to practise as a certified public accountant (practising); (L.N. 359 of 1996; 23 of 2004 s.55) shall be guilty of professional misconduct. By-law 29 Restrictions on name in which practice may be carried on Save with the approval in writing of the Council, a certified public accountant who, either on his own account or in partnership with any other certified public accountant or through a corporate practice, practises as a certified public accountant (practising) other than (23 of 2004 s.55) (a) (b) (c) (d) (e) in his own name; in the case of a firm of certified public accountants (practising), in his own name in association with the names of his partners; or in the case of a corporate practice, in his own name in association with the names of the other members of such corporate practice, save and except the name of any such member who is not a certified public accountant; (L.N. 359 of 1996; 23 of 2004 s.55) in the name of a firm in which he was lawfully practising at the commencement of these by-laws; in the name of a firm lawfully registered under section 28A of the Ordinance; or (96 of 1994 s.40; 23 of 2004 s.55) in the name of a corporate practice lawfully registered under sections 28D(4) and 28E of the Ordinance; (L.N. 359 of 1996; 23 of 2004 s.55; 15 of 2013 s.6) shall be guilty of professional misconduct. 14

15 Published by CPA Australia Ltd ABN December 2017 CPA Australia Ltd 2017 This material has been designed and prepared for the purpose of individual study and should not be used as a substitute for professional advice. The material is not, and is not intended to be, professional advice. The material may be updated and amended from time to time. Care has been taken in compiling the material but the material may not reflect the most recent developments and has been compiled to give a general overview only. Users of the material should not act on the basis of any of the material without first obtaining professional advice specific to their own situation. CPA Australia and the author(s) of the material expressly exclude themselves from any contractual, tortious or any other forms of liability on whatever basis to any person for any loss or damage sustained or for any consequence which may be thought to arise either directly or indirectly from reliance on statements made in this material. Any opinions expressed in the materials are those of the author(s) and not necessarily those of their affiliated organisations, CPA Australia Ltd or its members. All rights reserved. Without limiting the rights under copyright reserved above, no part of these notes may be reproduced or utilised in any form or by any means, electronic or mechanical, including photocopying, recording, or by information storage or retrieval system, without prior written permission from CPA Australia. 15