1 April 2017

CRAC NEWSLETTER

April 2017 Issue No.49

Practice Q&A

At present, the Statute of Auditors (approved by Decree Law No.71/99/M of 1

st November) is an

important statute regulating the auditing profession of Macao. The statute provides stipulations with regard to auditors’ professional requirements, practice, establishment of a firm, and disciplinary and criminal responsibilities. In addition, auditors/audit firms are required to comply with the existing Auditing Standards, Technical Auditing Standards, and Technical Guidelines for the Implementation of Technical Auditing Standards when performing the corresponding duties. Continuing from issue no.47, we shall be looking into an enquiry with regard to Article 4 of Technical Auditing Standards (Consideration of Laws and Regulations) and the corresponding answer in the current issue. For specific regulations, however, please refer to the statute above. Alternatively, readers are welcome to send in your enquiries in writing.

Answer: In accordance with Paragraph 15) of Article 4 of Technical Auditing Standards, if the auditor concludes that the non-compliance has a material effect on the financial statements in which it has not been properly reflected, the auditor should express a qualified or an adverse opinion.

In accordance with Paragraph 16) of Article 4 of Technical Auditing Standards, if the auditor is

precluded by the entity from obtaining sufficient and appropriate audit evidence to evaluate whether non-compliance that may be material to the financial statements, has, or is likely to have, occurred, the auditor should express a qualified opinion or a disclaimer of opinion on the financial statements on the basis of limitation on the scope of the audit. Meanwhile, Paragraph 8) of Article 7 of the same statute specifies that: ‘when being unable to obtain sufficient and appropriate audit evidence, the auditor should express a qualified opinion or a disclaimer of opinion.’

In addition, in accordance with Paragraph 5 from the

‘Reporting Standards’ section of Auditing Standards, Paragraph 22) of Article 12 of Technical Auditing Standards, and Paragraph 7) of Article 4 of Technical Guidelines for the Implementation of Technical Auditing Standards No.1 (Audit Report), when an auditor issues an opinion other than an unqualified opinion, they should clearly state the reasons and, if possible, indicate the extent of their impact on the financial statements. Hence, should the non-compliance act result in the auditor to issue a qualified opinion or an adverse opinion, the auditor must clearly state the reasons for doing so in the audit report and, if possible, indicate the extent of their impact on the financial statements.

2 April 2017

CRAC NEWSLETTER Issue No.49

CRAC Quick News

On 16

th March, Mr. Les Bradley (President of the Association of International Accountants, AIA), led a delegation

of 5 people and paid a visit to CRAC. At the meeting, representatives from both parties presented their respective foundation details and current development as well as shared their experiences on daily activities. Mr. Iong Kong Leong (CRAC Chairperson), Mr. Yung Chi Chung (CRAC member) and Mr. Ng Pou Man (CRAC member) received the delegation’s visit.

The lists of audit firms, auditors, accounting firms and accountants registered at CRAC as at 31st December 2016

have been published in the Official Gazette of Macao SAR (Series II, No.3 of 2017) for your reference.

Overseas Development

(Source: Chinese Institute of Certified Public Accountants website http://www.cicpa.org.cn) In December 2016, the Ministry of Finance has published 12 Auditing Standards for the Chinese

Certified Public Accountants (Ministry of Finance No.24 [2016] of the Ministry of Finance, collectively known as New Audit Reporting Standards), including a standard on Communicating Key Audit Matters in the Audit Reports. The New Audit Reporting Standards drew reference from the newly published International Standards on Auditing by the International Auditing and Assurance Standards Board (IAASB) in 2015.

The core of the New Audit Reporting Standards lies in the Auditing Standard for Certified Public

Accountants (CPAs) of China No.1504 – Communication on Key Matters in Audit Reports, which requires the addition of a key audit matters part in the audit report of listed companies, to disclose customized information of audit items such as key points and difficulties during audit work. Of the remaining 11 standards, substantive amendments had been made to 6 of them, while adjustments had been made to the wording of the remaining 5 standards with the purpose of maintaining the consistency within the auditing standards regime. In order to ensure a stable and smooth implementation of the New Audit Reporting Standard, implementation of the standards is split into phases with different steps, whereby different timetables and regulations have been set to the applicability of audit engagements for listed and non-listed companies.

Examination News

Results for round II of licensing examinations of 2016 were announced in January this year, whereby 4 candidates have passed all required subjects (1 for auditor, 3 for accountants). Looking back at 2016 as a whole, a total of 9 candidates have qualified for registration to practice. The table below presents some statistics of examinations over the past 3 years.

Year No. of Candidates Qualified for Registration

Auditors Accountants Auditors Accountants

2016 33 121 4 5

2015 29 164 1 8

2014 27 115 1 9 Round I of the licensing examinations for registered auditors and registered accountants/accounting

technicians 2017 is scheduled to take place between 3 and 17 June. Enrolment was open between 27 February and 10 March, whereby 78 applications had been received (registered auditors: 16; registered accountants: 62).

3 April 2017

CRAC NEWSLETTER Issue No.49

Training News

CRAC collaborated with the Association of Chartered Certified Accountants (ACCA), Certified Pratising Accountants Australia (CPA Australia) and Shanghai National Accounting Institute (SNAI) in hosting training courses in the first quarter of 2017. These courses provided a combined training of 12 hours to the approximately 250 students in attendance. The topic and training hours for each of the courses are listed below:

Date Topic Training Hours

18 February International Standards on Quality Control Workshop 6

17 March Monitoring Large Scale Construction Project 2

20 – 21 March Management Accounting – Strategic Perspectives 4

In response to industry demands, CRAC’s training will focus primarily on two sets of standards starting April 2017, which includes International Financial Reporting Standards (IFRS) and International Standards on Auditing (ISA). CRAC hopes that standards-related training courses provide genuine assistance to the industry in knowing, learning and grasping the standards’ requirements, and to assist the industry to continually enhance its professional levels and to better implement these standards in the professional work.

News regarding training courses are appropriately published on the DSF website (www.dsf.gov.mo,

CRAC section), as well as communicated to auditors and accountants by email. Please check your email boxes regularly for updates so as not to miss enrolment periods. Meanwhile, CRAC would like to appeal to all auditors and accountants who have previously not provided an email correspondence address to contact us for such information, so as to allow the most up-to-date information to be delivered. (tel: 8599 5344, 8599 5343; email: crac@dsf.gov.mo).

There had been a steady increase in number of participants in training courses in recent years. In order

to maintain order in these courses, CRAC makes adequate adjustments periodically with regard to enrolment, signing in, attendance records, and waiting lists. For example, enrolments that have been admitted cannot be transferred to another person. Hence, should a person become unavailable to attend a specific course, it is advised that they inform CRAC, so that we could arrange persons in line on the waiting list to attend instead.

In addition, with the purpose of enhancing learning efficiencies, the duration of courses held in the

evening will be reduced from 2.5 hours to 2 hours (no breaks in between). Meanwhile, certificates of attendance jointly issued by CRAC and collaborating organization will only be issued persons having completed all of the course hours. Kindly be informed that students leaving early will not be issued a certificate of attendance.

4 April 2017

CRAC NEWSLETTER Issue No.49

Mainland CPA Examinations

In 2009, a reform on the Mainland China Certified Public Accountants Uniform Examinations (aka

CICPA Exams) had been made, whereby the exam that was originally comprised of 5 subjects is now comprised of ‘6+1’ subjects, which is split into two phases: professional phase and integrated phase. It is possible to say that the reform has, in effect, raised the exam’s difficulty. Starting 2010, the CICPA Exams began establishing a venue in Macao. In 2016, the Macao venue has brought in some good news, in the form that a candidate from Macao has passed both phases of CICPA Exams. Mr. Ip is a registered accountant in Macao. We have the privilege to interview Mr. Ip, as he shared some tips on tackling the exams, professional directions and some words of encouragement to other candidates.

Mr. Ip registered simultaneously to sit both CICPA Exams and licensing exams for registered

accountants in Macao, for which he succeeded in passing both. When asked why he decided to register to sit professional exams from two different regions at the same time, Mr. Ip expressed that he had taken various elements into consideration. Firstly, Mr. Ip has been aware of the level of professionalism and perceived value of the CICPA Exams for a very long time; secondly, upon returning to Macao with a degree course completed abroad, Mr. Ip is now working in the financial accounting field at a Mainland–Owned Enterprise in Macao. In recent years, the integration between the economies of Macao and Mainland China has sped up substantially and, hence, the enterprise encourages its employees to obtain corresponding qualifications in both regions; thirdly, Mr. Ip believes that revision efficiency would be enhanced as one prepares to tackle both sets of exams at the same time.

With regard to preparing for CICPA Exams, Mr. Ip gave some sincere advice: after passing the first two subjects, Mr. Ip discovered that it is of utmost importance to learn the teaching material of the uniform examinations inside and out, since any bit of knowledge covered in these teaching materials could ultimately be tested on. In addition, given that the content of each subject possesses high degree of professionalism, it might often be inadequate to understand or fully grasp the content after just one single reading. Hence, from his personal experience: it might be ideal to go through all materials four times: first time being a general skim through, followed by intensive reading twice, and finally to bring all content together. Putting it into summary: Take root in teaching materials, perseverance is key!

At present, Mr. Ip is working in a financial institution.

Regarding the direction of his professional development, Mr. Ip has his objectives well penned for which he has high hopes for. Mr. Ip points out that: he intends to continue to add value to himself, and plans to acquire other professional qualifications such as on management accounting. His motive being: after acquiring professional qualification for registered accountants in the two regions, Mr. Ip is now given much more opportunities to handle work related to financial reporting and management accounting in his current department. Meanwhile, with sound background knowledge of the two regions, Mr. Ip has built a solid foundation in terms of learning the corresponding practical issues of Mainland China. (Cont.P5)

5 April 2017

CRAC NEWSLETTER Issue No.49

Mainland CPA Examinations

In 2017, the CICPA Exams will continue to establish an exam venue in Macao (professional phase exams). Online enrolment for this year will be open between 5 - 28 April, while actual examinations are scheduled for 14-15 October (Saturday and Sunday). Exams will be conducted in E-format (via computers). For detailed information, please refer to the General Regulation for Enrolment of People’s Republic of China Certified Public Accountants Uniform Examinations 2017 for Residents of Hong Kong SAR, Macao SAR, Taiwan Region and Foreigners. The general regulation (Chinese version only) can be found available from the CICPA website (www.cicpa.org.cn) or DSF website (www.dsf.gov.mo, under CRAC section). For enquiries, please contact the representation office in Macao – the Union of Association of Professional Accountants of Macao (tel 2835 6856) or CRAC (tel 8599 5350).

Date Time Subject

14 October 2017

(Saturday)

08:30~11:00 Auditing

13:00~15:30 Financial and Cost Management

17:30~19:30 Economic Laws

15 October 2017

(Sunday)

08:30~11:30 Accounting

13:30~15:30 Corporate Strategy and Risk Management

17:30~19:30 Tax Laws

With the intention of protecting the environment, CRAC has been sending information regarding training courses and newsletters to auditors and accountants via email in recent years. This has been well received by many since it enhances the efficiency of dissemination of information, playing our part in protecting the environment.

CRAC urges more auditors and accountants to be willing to receive information via email.

For information, please contact the CRAC office. Meanwhile, information regarding renewal of practising cards and similar notifications, CRAC will continue to communicate these via traditional postal service (or both).