Issue 2 Volume 18 February 2022 DRIVING BUSINESS SUCCESS PLUS: THE CIRCULAR ECONOMY The opportunities of circular models for Hong Kong businesses ATTRACTING THE NEXT GENERATION What can the profession do to attract the next generation of accountants? SECOND OPINIONS How should you develop soft skills? PUSHING FOR CHANGE Edmund Wong FCPA (practising) on his plans for the profession as the newly elected representative of the Legislative Council’s Accountancy functional constituency
PRESIDENT’S MESSAGE APLUS February 2022 1 Happy Chinese New Year. I wish you exceptional health, joy and prosperity in the year of the tiger. It is quite unfortunate that this year’s celebrations have coincided with the fifth wave of COVID-19 outbreaks in Hong Kong. The dire situation has seen daily confirmed cases surge into the thousands, compared to the “mere” double digits recorded when we presented the Institute’s tax policy and budget proposals for 2022-23 in January. In face of the many challenges emerging from the pandemic, I encourage you to remain vigilant and prioritize your well-being and health. For those looking to establish healthy hybrid working practices for the office, we have a “How to” article in this issue on page 28 with some great insights. Indeed, with the pandemic impacting the global economy and putting pressure on Hong Kong, measures in this year’s budget will be critical towards providing relief to businesses in the short term and revitalizing Hong Kong’s economy. During the announcement on 23 February, the Financial Secretary introduced a number of targeted relief measures, including HK$10,000 consumption vouchers, to help the public tide over these difficult times. Alongside my colleagues, I took part in presenting the Institute’s views on the budget to the media afterwards. The Institute has advocated for initiatives to help the public cope with ensuing economic pressures in the short-term as well as measures to improve Hong Kong’s fiscal position in the medium to long term. We are pleased to see the government is actively seeking avenues to relieve financial burdens for Hong Kong’s citizens, and we are happy to note that many of the suggestions from the Institute were included in the 202223 Budget. Nonetheless, the Institute has recommended that the government review the city’s revenue model to address its longstanding narrow tax base. You can read more about the Institute’s commentary in this month’s “Thought leadership” column on page 29. Another highlight of the budget we are happy to support is the government’s sustainability strategies to achieve netzero carbon emissions, which among others, included additional funding into the EV-charging at Home Subsidy Scheme and the expansion of the government’s green bond issuance. The Institute has repeatedly reaffirmed its commitment to taking the responsibility to minimize its own carbon footprint as well as enabling its members and stakeholders to contribute to a more sustainable future. As accountants, our roles have been growing in importance as the demand for environmental, social and governance information, and assurance increases in the business world. Earlier in February, I took part in a “meet the media” session organized by the Institute. I discussed a wide range of topics including the regulatory reform, the role of the Institute moving forward, the future of the profession, and latest developments of the Qualification Programme. During the interview, journalists were especially interested in the retention of talent within the profession. This is a topic we also explore in this month’s feature, where we found digital transformation in the profession and communicating the profession’s value to society to aspiring CPAs could be the key to attracting more talent. Read the story on page 14. Working with the media to better engage the wider public about the Institute and the profession is, in fact, one of our key strategies in the coming year. As I mentioned in my message in the January issue, the year of the tiger will be a transformative year for the Institute. With the discussions on the transition under the regulatory reform underway, my colleagues at the Institute and I have been tirelessly planning ahead on how we will reposition ourselves as a body, rebuild our image in society, and reinforce our members’ trust in us. In early February, the Council held its annual Strategy Day to lay down the blueprint for the coming year with key strategic focuses and a clear road map. Rest assured, the leadership team of the Institute will make every effort to bring these plans to fruition and ensure we can better serve our members. More information will be shared with members in due time, so please stay tuned. Loretta Fong CPA (practising) President Dear members, “The Council held its annual Strategy Day to lay down the blueprint for the coming year with key strategic focuses and a clear road map. Rest assured, the leadership team of the Institute will PDNH HYHU\ HȧRUW WR EULQJ WKHVH SODQV WR IUXLWLRQ and ensure we can better serve our members.”
CONTENTS Issue 2 Volume 18 February 2022 NEWS 01 President’s message 04 Institute news 07 Business news FEATURES 08 Leadership: Edmund Wong FCPA (practising) The new representative of the Legislative Council’s Accountancy functional constituency on how he will help the profession 14 A top career choice How to get more young people to choose accounting as a career 20 Closing the loop How accountants can help companies transition to a circular economy 26 Second opinions How should you develop soft skills? 28 How to Yan Jiejun, Head of Talent and Employee Experience, Hong Kong, Mercer, on how to make hybrid work, work 29 Thought leadership: Eugene Yeung CPA The Convenor of the Institute’s Budget Proposals 2022-23 SubCommittee, on this year’s budget 30 Q&A with a PAIB Hewitt Chan CPA, Retail Concept Director at Nike Greater China 31 Q&A with a PAIP Christopher Tam CPA, Director, Actuarial and Insurance Solutions, Deloitte 32 Meet the speaker What to expect from upcoming workshops on new quality management standards SOURCE 33 Ü ÕÃivÕ Ã > ºÃ«wi`» auditing standard? An overview of the Institute’s response to the IAASB’s exposure draft on LCE audits 34 A review of the V>ÃÃwV>Ì >` i>ÃÕÀiiÌ v w>V> 14A top career choice With long-held misconceptions surrounding the profession leading to a decline in fresh graduates vying for a role, what can the profession do to attract more young talent? 30 Q&A with a PAIB 31 Q&A with a PAIP
DRIVING BUSINESS SUCCESS About our name A Plus stands for Accounting Plus. It represents a profession that is rich in career options, stays relevant amid rapid changes, and adds value to business. This magazine strives to present the global mindset and varied expertise of Institute members – Accountants Plus. Editor Gerry Ho Email: gerry.ho@mandl.asia Managing Editor Jemelyn Yadao Copy Editor Jeremy Chan Associate Editor Nicky Burridge Contributor Thomas Lo Registered Office 2/FWang Kee Building, 252 Hennessy Road, Wanchai, Hong Kong Advertising enquiries Advertising Director Derek Tsang Email: derektsang@mandl.asia ISSN 1815-3380 President Loretta Fong Vice Presidents Roy Leung Edward Au Chief Executive and Registrar Margaret W. S. Chan Director of Corporate Communications Dr Wendy Lam Publication Manager Michael Wong Editorial Coordinator Maggie Tam Office Address 37/F, Wu Chung House, 213 Queen’s Road East, Wanchai, Hong Kong Tel: (852) 2287-7228 Fax: (852) 2865-6603 Member and Student Services Counter 27/F, Wu Chung House, 213 Queen’s Road East, Wanchai, Hong Kong Website: www.hkicpa.org.hk Email: hkicpa@hkicpa.org.hk instruments A summary of the Institute’s response to the IASB Request for Information on the classification and measurement of IFRS 9 35 Referral fees for introduction of clients and maintenance of a registered office What practitioners must keep in mind with regards to referral fees for the introduction of clients and in maintaining registered offices 36 Technical news WORK-LIFE BALANCE 40 Staying in tune CPA musicians on how music has helped them through thick and thin 46 Young member of the month Athena Tsui CPA, Senior Associate at Deloitte 48 After hours Institute members recommend their favourite ways to unwind 20 Closing the loop The sustainability-focused circular economy may help to address the issue of waste and underutilized resources, and create opportunities for businesses, but obstacles still stand in the way 48 40 Staying in tune After hours A Plus is the official magazine of the Hong Kong Institute of Certified Public Accountants. The Institute retains copyright in all material published in the magazine. No part of this magazine may be reproduced without the permission of the Institute. The views expressed in the magazine are not necessarily shared by the Institute or the publisher. The Institute, the publisher and authors accept no responsibilities for loss resulting from any person acting, or refraining from acting, because of views expressed or advertisements appearing in the magazine. ©Hong Kong Institute of Certified Public Accountants February 2022. Print run: 7,080 copies The digital version is distributed to all 47,273 members, 17,365 students of the Institute and 2,358 business stakeholders every month.
NEWS Institute news Business news 4 February 2022 Disciplinary findings Cheung Chun Bong CPA (practising) Complaint: Failure or neglect to observe, maintain or otherwise apply the fundamental principle of integrity in sections 100.5(a), 110.1 and 110.2 of the Code of Ethics for Professional Accountants (code of ethics), Hong Kong Standard on Quality Control (HKSQC) 1 QualityControl for Firms that PerformAudits andReviews of Financial Statements, andOther Assurance and RelatedServices Engagements, Hong Kong Standard on Auditing (HKSA) 230 Audit Documentation, HKSA 500 Audit Evidence, and being guilty of professional misconduct. Cheung practised in his own name and was responsible for his practice’s quality control system and the quality of its audit engagements. An initial practice review identified a number of deficiencies in the quality control system and audit engagements. In addition, Cheung was found to have created audit working papers and a self-monitoring review report on the quality control system in response to the practice review notification. Decisions and reasons: The Disciplinary Committee reprimanded Cheung and ordered the cancellation of his practising certificate, with no issuance of a practising certificate to him for 12months. In addition, Cheung was ordered to pay a penalty of HK$100,000 and costs of the disciplinary proceedings of HK$43,285. The committee further found that Cheung’s lack of integrity and competence to be serious, amounting to professional misconduct. The Institute welcomes the government’s 2022-23 Budget, announced on 23 February, and believes that the government is actively helping the public cope with the pandemic and tackle the economic downturn. The budget speech included numerous suggestions made by the Institute in its budget submission, such as tax rebates, tax deductions on residential rental expenses, issuance of consumption vouchers, tax incentives for single family offices, injecting additional funds into the EVcharging at Home Subsidy Scheme, holding an investment summit, and aligning Hong Kong’s tax policy with international tax rules. The Institute particularly welcomes the introduction of targeted relief measures, including HK$10,000 consumption vouchers, to mitigate the negative impact of COVID-19 on businesses and individuals. “It’s hard to say when the epidemic will be under control, and Hong Kong still has to fight a ‘protracted battle.’ In addition to issuing consumer vouchers to the public, we believe that the government should focus on providing more targeted shortterm measures to those currently in need of assistance. This can maximize the societal benefits given the limited resources,” said Loretta Fong CPA (practising), Institute President. The Institute, however, remains concerned about Hong Kong’s fiscal resilience in the medium to long term. It has long advocated broadening the tax base to mitigate the impact of changes in the economic cycle and unforeseeable shocks on the public purse, as well as an aging population. Members can read the Institute’s press releases and budget proposals on the Institute’s website and our response to the budget on page 29 to learn more. Results of first offering of QP Capstone announced The Institute launched the first offering of the Qualification Programme (QP) Capstone in the December 2021 Session and the results were announced on 25 February. QP students, workshop facilitators and examination panelists shared positive feedback, including that the Capstone helps develop and assess higherorder enabling skills, business acumen and professional judgement through its practical workshop activities and real-life case studies in examinations. Institute responds to the 2022-23 Budget From left: Eugene Yeung CPA, Convenor of Budget Proposals 2022/23 Sub-Committee, Institute President Loretta Fong CPA (practising); and Sarah Chan FCPA, Chairman of the Taxation Faculty Executive Committee.
APLUS Law Fei Shing CPA (practising) Complaint: Failure or neglect to observe, maintain or otherwise apply HKSA 250 Consideration of Laws and Regulations in anAudit of Financial Statements, HKSA 701 Modifications to the Independent Auditor’s Report, section 270Custody of Client Assets of the code of ethics, and the fundamental principle of professional competence and due care in section 100 of the code of ethics. Law is the sole proprietor of F.S. Law&Co. The firmaudited the financial statements of a private company for the two years ended 31March 2010 and 2011. Deficiencieswere found in the audits and in Law’s conduct under his professional relationshipwith the company. Law failed to: (i) obtain sufficient evidence to justify his concurrencewith the company’s adoption of the exemptions under section 141D of the then Companies Ordinance and the financial reporting standard for small- andmedium-sized entities as a basis of financial statement preparation, when the company’s holding of a subsidiary at the timewould have disqualified it fromthe exemptions; (ii) qualify his auditor’s opinion for a limitation of audit scope over provision for impairment loss on an investment; (iii)obtain sufficient appropriate evidence to support his acceptance of the company’s breach of statutory disclosure requirements applicable to a charge over the company’s assets that wasmade to secure banking facilities granted to a director-controlled entity; (iv)segregate funds transferred to himby a shareholder (who was also a director) of the company, andmake adequate enquiries to ensure the transfer compliedwith relevant laws and regulations; and (v) maintain professional knowledge and skill at the level required to ensure the company received competent professional service. In the course of the disciplinary proceedings, Lawapplied for judicial review twice. The proceedingswere held over for some five years until the judicial reviewswere completed and dismissed by the court. Decisions and reasons: The Disciplinary Committee reprimanded Law and ordered the cancellation of his practising certificate, with no issuance of a practising certificate to him for 15months, with effect from 14 January 2022. In addition, the committee ordered Law to pay a penalty of HK$160,000 and costs of disciplinary proceedings of HK$4,943,123. The committee’s order included an enhanced order requiring Law to bear the Institute’s cost in full due to his conduct and resulting delays. The committee noted Law’s breaches were very serious in that they demonstrated a serious lack of understanding of auditing and ethical standards, and the fundamental and basic legal requirements relating to the preparation and presentation of financial statements under the Companies Ordinance. The breaches were aggravated by Law’s limited remorse and lack of candour, as seen in his changing and evolving defences in the course of the disciplinary proceedings, and by his obstructive conduct that resulted in significant delays to the proceedings, substantial wasted costs and the Institute’s need to instruct external counsel to act for it. Settlement Wan Tat Kay Dominic Savio CPA (practising) The Hong Kong Institute of CPAs has settled regulatory proceedings concerning alleged non-compliancewith its professional standards and professional misconduct committed byWan Tat Kay Dominic Savio CPA (practising). Thematter concerns significant audit deficiencies identified in the Institute’s initial practice reviewof D. Wan&Company (practice). The practice reviewcovered the practice’s quality control systemand the audit of a private entity for the year ended 31March 2018. Wanwas responsible for the quality control systemandwas the engagement partner of the audit. The practice reviewer identified significant deficiencies that showed (i) Wan’s inadequate audit methodology for the audit engagement; (ii) Wan’s failure to perform adequate audit procedures, and/or prepare adequate audit documentation, on a number of material items in the financial statements: unlisted investment, inventories, sales and purchases; (iii) substandard auditor’s report on the financial statements issued by Wan. In addition, the practice reviewer found deficiencies concerning the practice’s monitoring process and compliance with the Institute’s ethical requirements on independence. As a result of the above, Wan failed or neglected to observe, maintain or otherwise apply: (i) The fundamental principle of professional competence and due care under sections 100.5(c) and 130.1 of the code of ethics; (ii)HKSQC 1 QualityControl for Firms that PerformAudits and Reviews of Financial Statements, andOther Assurance and RelatedServices Engagements; and (iii)HKSA 230 Audit Documentation, HKSA 500 Audit Evidence, and a number of other HKSAs. Themultiple deficiencies identified also demonstratedWan’s blatant disregard to professional standards, amounting to professional misconduct. Settlement agreement: The Council of the Institute has agreedwithWan that: 1. Wan acknowledges the facts of the case and areas of noncompliancewith professional standards; 2. Wan be reprimanded; 3. Wan pays a financial penalty of HK$80,000 and costs of HK$50,000; and 4. Wan undertakes to cease providing audit services for a period of one year. The Institute considers a settlement on the agreed basis to be in the public interest. In the circumstances, the Institute is satisfied that there is no purpose to be served in pursuing disciplinary proceedings. Details of the disciplinary findings and settlement are available on the Institute’swebsite. February 2022 5
NEWS Business HK$170 billion The total budget for the relief package announced by Paul Chan FCPA, Hong Kong’s Financial Secretary, on 23 February as part of this year’s budget. The figure, which is more than double the amount seen in 2021, will go towards funding public health measures, helping struggling businesses, and provide consumption vouchers, tax breaks and rental relief amid the city’s current COVID-19 outbreak. 3.9% Hong Kong’s unemployment rate for the three months ending in January. The figure, which is the same as the previous rolling three-month period running from October to December according to the Census and Statistics Department, is the lowest since February 2020, which saw a peak of 7.5 percent. US$548,000 The amount a Chinese university student lost after selling his non-fungible token (NFT) through a scam link. Fraud cases involving NFTs are seeing a sharp increase due to a current lack of regulation in Mainland China surrounding the buying and selling of NFTs. Proposed technologyrelated revisions to the Code The title of the exposure draft issued by the International Ethics Standards Board for Accountants on 18 February. The exposure draft seeks to expand the International Code of Ethics for Professional Accountants’ relevance in an environment being reshaped by rapid technological advancements. Comments are requested by 20 June. 12,790 The number of mergers and acquisitions recorded in Mainland China in 2021. The number is a 21 percent increase from the previous year, according to PwC’s China M&A 2021 Review and 2022 Outlook. Greater Bay Airlines received its license from the Air Transport Licensing Authority on 21 February, clearing the way for the start-up airline to operate scheduled air services between Hong Kong and 104 routes covering Mainland China, Taiwan, Japan, South Korea and destinations in the Asia-Pacific region. February 2022 7 Mazars USA LLP The firm that cut ties with former United States president Donald Trump this month, noting that it could no longer stand behind a decade of annual financial statements it prepared for the Trump Organization, according to court documents. It comes amid new evidence that Trump and his company used “fraudulent or misleading” valuations of its golf clubs, skyscrapers and other properties to receive loans and tax benefits. Accounting Considerations for a Special Purpose Acquisition Company The title of the new publication by the Hong Kong Institute of CPAs, which highlights certain key accounting considerations relevant to a typical special purpose acquisition company throughout its lifecycle. It can be found on the Institute’s website. “The IRSG believes that regulation of ESG ratings is now desirable, to provide more transparency around the basis for ESG ratings and mitigate against potential conduct risk.” – The International Regulatory Strategy Group (IRSG) said in a report released on 21 February. The IRSG, a regulatory research body, said that Britain should regulate sustainability ratings on companies to improve transparency, reduce the risk of greenwashing and protect investors.
VOICING MEMBERS’ NEEDS Photography by Calvin Sit After his election win in the Legislative Council’s Accountancy functional constituency, Edmund Wong FCPA (practising) talks to Jeremy Chan about the regulatory reform, the sustainability of the profession, and how he will be raising the interests and concerns of all accountants PROFILE Edmund Wong FCPA (practising) To Edmund Wong FCPA (practising), there has never been a more crucial or complex time to be the Accountancy functional constituency’s representative in the Legislative Council (LegCo). From the regulatory reform of the profession to the growing opportunities in the Greater Bay Area (GBA), Wong is looking forward to advocating on these issues on behalf of accountants. “Through this role, I’ll be able to help my fellow accountants and serve as a key communication channel between the government, the Hong Kong Institute of CPAs, and the profession,” says Wong. “And with these new powers come new responsibilities.” Wong, who will hold his new role as a LegCo member for the next four years, will be balancing his new responsibilities along with his full-time job of managing his father’s firm, Patrick Wong C.P.A. Limited, as Practising Director, as well as his roles in various Institute committees. These roles, Wong says, have proven indispensable in understanding the issues faced by members. His desire to find better solutions prompted him to run as a candidate in the recent LegCo election, held on 19 December 2021. Wong secured a total of 3,175 votes – nearly 40 percent of all total votes – to win a seat to represent the Accountancy functional constituency, which is one of 30 functional 8 February 2022
APLUS February 2022 9
PROFILE Edmund Wong FCPA (practising) Edmund Wong FCPA (practising), Practising Director at Patrick Wong C.P.A. Limited, is the representative of the Legislative Council’s Accountancy functional constituency. constituency seats in LegCo. As of 2021, the Accountancy functional constituency is composed of more than 27,000 CPAs. Wong considers the victory as the highlight of his career so far, and an opportunity for him to make a tangible impact on the profession. A major task Top of Wong’s list of priorities is to help the profession navigate the upcoming regulatory reform, which will see the regulatory and disciplinary powers of the Institute being handed over to the Financial Reporting Council (FRC) later this year. “This reform is, without a doubt, a major concern among members,” he says. “With most CPAs used to the existing practice reviews from the Institute, this change will take some getting used to, which is causing a bit of worry.” Wong notes that he will be closely monitoring subsidiary legislations and by-laws regarding the reform that will be submitted to LegCo’s Panel on Financial Affairs, which is a panel tasked with scrutinizing government policies and issues of public concern relating to financial matters. Despite the transfer of powers, Wong believes that the Institute will still play a key role in the profession and can now focus on strengthening its role in the functions it is retaining. “The Institute will remain in charge of roles such as standard setting, member services, and education and training. In other jurisdictions, such roles may be shared by other member bodies and authorities – but in Hong Kong, the Institute is in charge of all these roles,” he elaborates. “In short, the Institute wouldn’t be wearing two hats anymore. Because the Institute is a member body as well as a regulator, it has been advising practitioners to refer to a specific accounting standard or the code of ethics when it came to technical 10 February 2022
APLUS enquiries instead of providing clearer guidelines. After the reform, it will be able to focus on the welfare of members more.” For almost a decade, Wong has played an active role at the Institute. He is currently Chairman of the Small andMedium Practices Committee and Deputy Chairman of the Greater Bay Area Committee. He has also served as a member of the Professional Development Committee and as deputy chairman of the YoungMembers Committee. He is also a Past President of the Society of Chinese Accountants and Auditors. His experience working with different members of the profession since he graduated has provided himwith valuable insight into the various difficulties that they face on a daily basis, such as the issue of long working hours, as well as challenges which include the impact of COVID-19-related restrictions on the audit profession. “I’ve been in several meetings with the Institute to see if there’s any unfinished business to be carried forward from previous councillors. As a representative of the accounting profession, it’s important that I maintain a close dialogue with different bodies. This way, all opinions can be heard,” he says. “This has been greatly helpful in my role as a LegCo member so far.” In light of the upcoming reform, Wong notes that many members, especially those in small and medium practices (SMPs), are worried about potential fee increases. “One concern I’ve heard frommembers is that because the FRC has taken on new roles, they might not have the adequate funding; they’re concerned that fees, such as registration fees imposed by the FRC, will be too high, which will be a burden to their practice,” he explains. Wong, who has joined LegCo’s Finance Committee, Panel on Commerce and Industry, Panel on Economic Development, Panel on Financial Affairs, and Panel on Security, says he has voiced this issue during a LegCo Finance Committee meeting held last month. “I’ve already raised this concern to the Financial Secretary. I hope that in their upcoming budget, they’ll be able to allocate additional funds to the FRC in order to reduce the burden for accountants.” Wong will also be working closely with the Chairman of the FRC and the Institute. “I’ve been meeting with the FRC and the Institute’s leadership team to talk about the regulatory reform and our members’ concerns,” he notes. “I hope to be a voice for the profession during this whole process. This will be a major task this year.” Putting the profession first Wong also plans on using his new role to deal with the issue of attracting and retaining talent in the profession, particularly young people, and address deepseated issues. “Many accountants are leaving their jobs because of long working hours and, often times, a salary that doesn’t meet their expectations. I believe that an accountant’s salary has to be proportionate to the amount of work they put in. It’s quite a serious problem,” he says, highlighting that addressing the problem will also help to enhance the reputation of accountants and how they are viewed in society. Wong notes that he is intent on working closely with the FRC to find solutions. “It is an issue that I have voiced to the FRC. They aren’t only taking on a regulatory and disciplinary role; they’re looking to promote the healthy growth of the profession. The FRC understands that young accountants are key to the future of the profession and share the same views on the issue of long working hours – this will be on our agenda for the next four years.” He notes that challenges such as the COVID-19 pandemic have pushed some firms to adjust their fees in order to retain clients, which, in turn, has affected staff remuneration. “Some firms might offer a comparatively low audit fee in order to stay competitive,” he says. Wong cautions that though firms are able to retain clients, As the newly elected representative of the Legislative Council’s Accountancy functional constituency, EdmundWong FCPA (practising) will be focused on guiding the profession through the upcoming regulatory reform; communicating the concerns of young members and small and medium practices to the government, Financial Reporting Council and the Institute; and identifying more opportunities for both practising and non-practising members to work in the Mainland. “As a representative of the accounting profession, it’s important that I maintain a close GLDORJXH ZLWK GLȧHUHQW bodies. This way, all opinions can be heard.” February 2022 11
PROFILE Edmund Wong FCPA (practising) the change in pay for staff may deter accountants, especially fresh graduates, from staying with firms for longer periods. He believes this problem will persist for some time. To cope, he advises firms to ensure audits are performed to the highest level for clients. This, Wong adds, will help them avoid any disciplinary measures and resultant fees, maintain credibility, and retain clients as well as staff. “If fees rise to a reasonable level, salaries would also rise, and this will, in turn, attract more young talent to the profession,” he says. Having spent most of his career running and managing an SMP, Wong knows the challenges smaller firms face when it comes to staying ahead of developments in the profession. “SMPs simply lack the resources,” he says, referring to technical or specialist partners who provide help and advisory services to clients. “Technical support is important; accounting standards, auditing standards, tax laws and company ordinances are always changing, and SMPs experience a hard time keeping up with these developments.” With his first-hand experience, Wong is determined to proactively voice the concerns of SMPs to the government, the FRC, and the Institute. “I feel obligated to listen to the concerns of fellow SMPs and explain them to the relevant authorities. I’ll be able to better serve SMPs in this aspect in my term.” Long-term benefits Despite the current wave of COVID-19 infections causing disruption across Hong Kong, Wong places trust in the city’s resilience, and says it still holds one prime advantage – its close proximity to Mainland China, which he adds, is key to the city’s economy. He is also hoping for quarantine-free cross-border travel between Hong Kong and Mainland China to take place as soon as the current outbreak is brought under control. “Even if we are unable to open up the border completely, the Hong Kong government should open its border with Mainland China or at least the GBA. We are positioned very well to maintain a good level of competitiveness once the border opens,” he says. Wong says he has been communicating with the government to explore whether it is possible for accountants to be exempted from quarantine upon their return to Hong Kong. “With Hong Kong’s proximity to Mainland China, many accountants are required to travel across the border to discharge their duties and carry out engagements in person. Due to COVID-related lockdowns and quarantines, many accountants are unable to perform their duties in Mainland China.” Indeed, with the vast opportunities for work and collaboration in the GBA alone, Wong has long been pushing for both practising and non-practising accountants to be able to easily work across the border. “For the past 20 years, we’ve been looking at whether CPAs in Hong Kong can join CPA firms in Mainland China and if non-practising CPAs can work in non-assurance services or consultancy services there,” Wong says. He notes how challenges include Mainland residency requirements and passing CPA examinations that are in Chinese can prove difficult for CPAs in Hong Kong, where accounting syllabuses and examinations are currently in English. “I understand that this is not an easy task, but I’m determined to accomplish this within the next four years.” There may be obstacles to overcome in the area of tax, Wong notes, such as the implementation of the Organization for Economic Co-operation and Development’s tax framework, base erosion and profit shifting (BEPS) 2.0, which will introduce a global minimum tax on multinational enterprises (MNEs) in Hong Kong. BEPS 2.0, according to a statement issued by the Hong Kong government in October 2021, will mainly ensure MNE groups meet the new conditions and is unlikely to affect small and medium enterprises (SMEs). Wong believes that the requirements may affect SMEs, due to the reliance on SMEs by large corporations. “For example, many SMEs work for multinational corporations (MNCs) as suppliers. And without investments or with less investments from MNCs, those SMEs will likely feel an impact,” he says. According to statistics from the Hong Kong government’s Trade and Industry Department, SMEs constitute more than 98 percent of business establishments in Hong Kong. Some MNCs, Wong adds, might be less willing to invest in Hong Kong because of the impact of BEPS 2.0 on the city. “This may have an impact on Hong Kong’s economy and on employment as well,” he says. However, Wong notes that until the requirements come into effect in 2023, it is still too early to draw conclusions, and that Hong Kong will continue to attract both large- and medium-sized, and small companies with its low tax rate, among other benefits, even after the implementation. “Hong Kong, with its stable legal system, is also positioned well for investors to benefit from both Mainland China and the Asia-Pacific region. This will always be a key advantage.” Striking a balance Wong regards balancing his role as LegCo member and his other roles “ For the past 20 years, we’ve been looking at whether CPAs in Hong Kong can join CPA firms in Mainland China and if non-practising CPAs can work in non-assurance services or consultancy services there.” 12 February 2022
APLUS as the biggest challenge he has faced in his career so far. “It’s a big step going from an accountant – one who has spent the last 15 years in the profession – to being a legislative councillor,” he says. “For the past two months, I’ve had to work in both my own office and in my LegCo office each day. As a functional constituency representative of the accounting profession, I need to maintain my role in the profession in order to understand the difficulties of fellow accountants. I’m always trying to find ways to strike a better balance.” However, he embraces this challenge and is deeply committed to helping the profession navigate challenges during the next four years – and for the rest of his working life. “Our profession deserves better,” Wong says. “I’ve been speaking with many accountants over the past two months regarding some of the difficulties they have been facing – and helping them solve their problems makes me passionate about supporting the profession.” Wong’s many responsibilities leave himwith little spare time. “Since being elected, I believe there are no ‘official’ working hours for me now,” he laughs. “Whenever help is needed, I want to be there. I have different people calling me on a daily basis to voice their concerns or opinions. I’m busy, but I enjoy helping people.” Wong’s passion for helping society is also evident in his personal life. When he finds time on the weekends, he volunteers for the Hong Kong government’s Auxiliary Medical Service, and has been doing so since he was a secondary school student. “I joined at the age of 16. My main duties include providing first aid and ambulance services for public events. We stand at the front line and help those in need,” he says, noting how he volunteered to be medical personnel during the Standard Chartered Hong Kong Marathon in October 2021. “When I’m on the front line in my roles, I feel I am helping society at large.” In the months and years ahead, Wong hopes to lay the right groundwork for young accountants to succeed, and for each one to feel the same sense of joy and satisfaction that he has felt as an accountant since the start of his career. “With my new role, I now serve Hong Kong as a whole,” he says. “And I want to do my best in helping the profession attract more young accountants, and letting them know that it is indeed a fulfilling career. I plan on doing whatever I can to improve the profession for the next generation.” Wong has played an active role in the Institute. He is currently Chairman of the Small and Medium Practices Committee and Deputy Chairman of the Greater Bay Area Committee. “ I’ve been speaking with many accountants over the past two months regarding some of the difficulties they have been facing – and helping them solve their problems makes me passionate about supporting the profession.” February 2022 13
RECRUITMENT Attracting talent From climate change to technological disruption, the world is changing at a rapid pace. Businesses are forced to evolve to meet these challenges – and accountants are required to change with them. However, the scope of the different roles taken on by the modern accountant has not always been clearly communicated, impacting recruitment of the next generation. “In the past, recruitment talks fromCPA firms at universities would have a full house. These days, not many students attend,” says Simon Lee CPA, Honorary Institute Fellow, The Asia-Pacific Institute of Business at the Chinese University of Hong Kong Business School. The profession is also grappling with an image problem, says Paul She CPA (practising), Partner, Audit and Assurance at Mazars, and Chair of the Hong Kong Institute of CPAs’ Qualification and Examinations Board. He notes that many young people have the misperception that accounting is a “boring, routine, underpaid, sunset profession.” Observers believe that by better communicating the dynamic nature of accounting and the important and varied role it plays in both business and society today, young people would be able to see that the profession aligns with many of their own career aspirations. The accounting profession, like many other professions, is facing a diminishing pipeline of young talents entering the field. Nicky Burridge finds out what should be done to attract the next generation of accountants Illustrations by Gianfranco Bonadies A TOP CAREER CHOICE 14 February 2022
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RECRUITMENT Attracting talent A different generation Generation Z, broadly defined as those born between 1997 and 2012, have different priorities when it comes to choosing a career, compared with older generations. Carly Yau, Associate Partner at recruitment firm Page Executive, the recruitment search division of PageGroup, explains that Gen Z look for flexibility in the workplace and are drawn towards organizations that offer job rotation opportunities. “A company’s social position and how they contribute to society is also a key factor, with these individuals targeting companies that have the same values as their own personal values,” she adds. AdamWong CPA (practising), Audit Director at EY, and Deputy Chairman of the Institute’s Young Members Committee, says in his experience, Gen Z are also more innovative and assertive. “They know their own mind well and will speak up for their ideas. They have multiple skill sets and diverse interests.” He adds that they also tend not to stick to a career with one company, and are flexible in adapting to different roles. “In my opinion, Gen Z look for jobs that value their opinions and provide them opportunities to develop their skill sets. They value jobs that create a positive impact and meaning for society.” Lee suggests Gen Z also regard traditional careers, such as accounting and banking, as being “old-fashioned.” “They want to show an inspiring career on their CV, which might include working for a start-up, or a nongovernmental organization helping society,” he says. Overcoming misconceptions While the career path of a CPA and the diverse opportunities it opens up aligns well with many of Gen Z’s aspirations, there are still misconceptions about what the work of accountants involve, which may be hindering them from considering it as a career. Wong thinks young people often have a stereotypical impression that the accounting profession involves long working hours, routine work, and a lack of flexibility over how their work is carried out. There is also a perception that 16 February 2022
APLUS only a minimum level of technology is involved in the work, and there is a lack of room for people to express their own opinion, he says. Things have changed, says Wong, who wants young people to know that the role of accountants has evolved from carrying out routine back-office work to being business advisors, armed with big data and data analytics. “The accounting profession’s voices are being heard and valued in important decision-making processes. These changes need to be communicated to the next generation of accountants to address this misconception,” he says. Paul She suggests the profession needs to be more vocal about the career progression opportunities it offers, and shift from talking about “training workers” to “developing talent.” “Different people have different expectations for their career path. We need to understand this and provide the infrastructure to facilitate their ideal development, not just treat them as tools for our business.” He adds that this concept has been embedded in the Institute’s new Practical Experience Framework, which is part of its new Qualification Programme (QP). Lee agrees that existing preconceptions are discouraging young people from joining the profession. He adds that accounting is also seen as being heavily governed by rules and regulations, such as the International Financial Reporting Standards and tax laws, which may be off-putting for some. He points out: “Accounting is about far more than just this. It is about business and society. It offers young people exposure to different industries, which is interesting and can align with their goals. Allowing them to have more rotations in the early years would enable young people to understand their aspirations and choose the right career development path.” Ewan Clarkson, Chief People Officer at PwC Mainland China and Hong Kong, points out that Gen Z want to feel that they are creating value and making a personal impact through their work, all while being given the opportunity to continuously learn and upskill. A career in accounting nowadays, he says, ticks these boxes. “With the purpose of building trust in society and solving important problems, the next generation of accountants will play a critical role in restoring trust for organizations, capital markets and society at large.” He adds that the profession will continue to innovate and apply new technologies, meaning the next generation of accountants will need to be equipped with up-todate digital skills. At the same time, accountants have a chance to contribute in new areas and bring greater impact as organizations now look at more than just their financial returns, but pay more attention to their environmental and social impact. A growing diversity of skills What young people may not be aware of is that as the accounting profession evolves, so have the skills that accountants need to do their jobs. Paul She points out: “In the past, accountants were expected to be more focused on technical skills, such as accounting, tax and auditing, to provide their professional services. However, the market now requires all-round solutions from accountants.” In order to meet this demand, he says accountants need to equip themselves with a range of new technical and nontechnical knowledge, such as in environmental, social and governance (ESG), technology, public policy and politics. Yau agrees: “Accounting is no longer just about the numbers, but about the financial management that drives companies’ missions.” She adds that with many companies setting up shared services centres to focus on the operational accounting work, senior finance leaders have additional time to formulate business plans. As a result, alongside technical competence, she thinks it is important that accountants have the skills to act as a business partner, helping to translate numbers into meaningful action points that enable the business to achieve its goals. Lee points out that there are nowmany multidisciplinary issues and new areas that companies have to get to grips with, ranging from ESG and environmental science, to cryptocurrencies and start-ups. “Multidisciplinary knowledge is definitely needed. Some business schools are moving towards this direction and require business students, including accounting students, to take social science and IT subjects,” he says. Hot areas One of the key “hot” areas in which accountants are increasingly required to learn skills is in new technologies such as artificial intelligence (AI) and big data analytics to drive digital transformation. Yau thinks accountants need to “ Different people have different expectations for their career path. We need to understand this and provide the infrastructure to facilitate their ideal development, not just treat them as tools for our business.” February 2022 17
RECRUITMENT Attracting talent be on top of digital transformation and process improvements to enable them to stay agile and add value amid today’s rapidly changing business environment. Wong agrees: “With the introduction of new technologies, repetitive and routine work is being replaced by AI and software. Accountants are more focused on using big data to analyse the financial performance of the business and how the financial figures correlate to different functions within the company.” He adds that with the introduction of new technology, accountants are not only in charge of preparing and reviewing accounting records and financial statements, but they also need to understand the business flows of the company and how different processes interact with each other. Paul She points out: “The accounting profession should have the ability and willingness to understand and appraise the impact of new technology on our environment and economy. Our ways of doing business and living will be significantly affected by this transformation.” Clarkson agrees, saying that by combining deep domain expertise with digital capabilities, accountants will be able to bring deeper analysis, spot areas ripe for digital improvement and leverage automated technology to deliver value to clients. “Change is happening at an unprecedented rate. To stay ahead of competitors, businesses need new operating models that enable digital transformation of the entire organization and achieve rapid profitable growth. A digital-enabled and tech-empowered accountant will be in a more advantaged position to help businesses automate workflow, bring deeper datadriven insights to inform strategic decisions and stay ahead of risks and trends through data analytics and visualization tools.” Meanwhile, as companies pivot towards a digitally-driven business model, cybersecurity is becoming an increasingly important area. “Leveraging their experiences in accounting and auditing, accountants have the chance to build new domain expertise and tech skills to excel in this area. In particular, protecting organizations against cyber threats and privacy risks,” Clarkson says. Another important area in which there is growing demand for skilled accountants is ESG. As more companies are disclosing their policies and performance in this area – often prompted by regulatory requirements – accountants have an important role to play in helping to measure and provide assurance on data in this area. Clarkson points out: “The capital market is increasingly looking at social and environmental sustainability issues as an important performance indicator for businesses. Accountants who have related domain knowledge and capabilities will be able to advise clients on this topic, with the potential to lead in this new area.” Wong agrees: “Accountants can participate in establishing policies or coordinating events for corporates, their customers and respective stakeholders. The roles of an accountant nowadays is becoming less stereotypical and more interesting.” Critical thinking and communication As the business environment undergoes rapid change, Paul She says accountants also need to be able to excel in a range of higher-order enabling skills, such as problem solving, critical and lateral thinking to identify complex problems, including ethical dilemmas, and developing professional solutions. Clarkson adds: “As digitalization accelerates, so does the need for human-centric skills, which requires creativity and innovation, all led by a genuine human touch that connects people and improves experiences.” Yau stresses that accountants also need to develop strong interpersonal skills to build meaningful relationships with colleagues in other departments outside of finance, such as sales and marketing, IT and operations. “Understanding their pain points will help them connect the dots to how the financial results can help them devise strategic ideas to drive the business.” Paul She adds: “Accounting is not just about figures. Accounting is an art involving humans. It is about judgement, managing expectations, communication, and conflict resolution, to name a few. It is a career full of opportunities and challenges.” Attracting the next generation To attract the next generation of accountants, Wong suggests the profession should be more proactive about communicating developments in their industry, particularly the opportunities created by new “hot areas.” “The profession should always embrace change and value the voices of the next generation of accountants,” he says. “Combining “A digital-enabled and tech-empowered accountant will be in a more advantaged position to help businesses automate workflow, bring deeper data-driven insights to inform strategic decisions and stay ahead of risks and trends.” 18 February 2022
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