Info Paper

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Information paper on

Enhancements to the CPAqualification programme

QP 10 years of success stories and counting!

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Executive Summary 1-2

1. Overview o the enhanced CPA quali ying process 3

2. Pre-entry education 4-5

3. Pro essional accountancy education 6-9

4. Practical experience ramework 10

5. Transitional arrangements 11

6. Enquiries 12

Appendix I Detailed competency ramework: QP pre-entry education ordegree holders (accountancy degrees and conversion programmes)

Appendix II Detailed competency ramework: QP pre-entry education orsub-degree holders (pro essional bridging examination)

Appendix III Detailed competency ramework: QP accountancy education(modules and inal examination)

Appendix IV Detailed competency ramework: QP practical experience

Contents

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Published in April 2009

2009 Hong Kong Institute o Certifed Public Accountants. All rights reserved.

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Hong Kong Institute o CPAsIn ormation paper on

Enhancements to the CPA quali cation programme

Executive Summary o Enhancementsto the CPA Qualifcation Programme (QP)

5. Over the past ten years, the Instit utes

Examinations Board has regularly gathered

comments and suggestions and made

re inements to continuously improve the

quality and the delivery o the QP. However,

to ensure that the Fi th Long Range Planaim is achieved, the Examinations Board

established a Working Group to conduct

a major review o the QP, taking into

account the latest Hong Kong and mainland

pro essional and business developments, as

well as international best practice.

6. Two independent consultants were engaged

to help conduct this review. In 2007, the

Institute o Chartered Accountants oScotland (ICAS) conducted an audit and

gap analysis in the implementation o the

QP and developed updated competency

requirements, in plain English, or the

di erent stages o the quali ying process or

an entry-level CPA.

7. The ICASs indings and recommendations

were then validated by a human resources

consultant, Human Scope Limited, in 2008to provide market benchmarking o the

competencies against industry HR and

Talent Management standards; and to

gather the views o key market and industry

stakeholders or their visionary inputs on

the QP competencies. This is to ensure that

the prescribed competencies meet the uture

requirements o the pro ession and train our

prospective CPAs as leaders o tomorrow.

. The Hong Kong Institute o Certi ied Public

Accountants (CPAs) is responsible or training

and registering CPAs as one o its role as

the statutory licensing body or pro essional

accountants in Hong Kong, under the

Pro essional Accountants Ordinance (Chapter50, Laws o Hong Kong). To ensure that new

entrants to the accountancy pro ession are

suitably trained and quali ied, the Institute

established the QP in 999.

2. The QP has served to meet the needs o our

students, employers and the pro ession well

as a premier designation internationally

recognized by all stakeholders. It has

registered over 7,000 students andproduced over ,300 graduates since its

commencement in 999. The annual intake

stands at a healthy 3,000 each year.

3. The accountancy pro ession in Hong Kong

has undergone numerous cycles and phases

o changes as the business world evolves. To

ace the challenges ahead, it needs to cope

not only with the increasing sophistication o

the nancial industry in Hong Kong, but alsowith the ast moving business environment in

the world and to cope with challenges such

as the current global nancial turmoil.

. The Institute had announced, in its Fi th Long

Range Plan released in 2006, its strategic

aim to ensure our QP is world-class and

train accountants with the quality, skill and

expertise that can proudly support Hong

Kong as a major nancial market, centre or

business and gateway to mainland China.

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Hong Kong Institute o CPAsIn ormation paper onEnhancements to the CPA quali cation programme

2

8. Consultations with employers, QP students,

graduates, major education providers

and practitioners were carried out or

both rounds. The recommendations and

ndings rom the consultants were care ully

considered by the QP Major Review Working

Group in developing an enhanced QP, which

will be implemented in late 20 0.

9. Essential ly, no major structural change is

proposed as the eedback rom the two

independent rounds o consultation gave

very high regard to the QP, especially on

the development o generic skills and the

inclusion o the workshop component as part

o the pro essional assessment. However,

there are various areas where enhancements

are desirable. These enhancements to the

QP are summarized as ollows:

A n u p d a t e d s e t o p l a i n E n g l i s hcompetency requirements or pre-entryeducation, pro essional accountancyeducation and practical experience, thatimprove the consistency and linkage othe three areas, is adopted.

The workshop component o the QPwill comprise ormative activities thatdevelop the prescribed competencies,with no marks contribution. However,success u l comple t ion o modu leworkshops shall be a prerequisite ortaking the module examination.

Renaming Module B rom FinancialManagement to Corporate Financing,to better re lect additional learningoutcomes and materials to increase thecoverage o corporate nance content.

Renaming Module C rom Auditing andIn ormation Management to BusinessAssurance to better re lect additional

learning outcomes and materials coveringareas o corporate governance, internalcontrols and risk management.

The o ering schedule o the QP ismodi ied to provide more opportunities

or students to study the modules. Twosessions o module examinations will beo ered each year with all our modulesavailable at each session.

0. The enhanced QP aims to incorporate

both Hong Kong and international best

practice into the updated competency

requirements. Special emphasis is placed

to ensure that the prescribed competency

requirements are adequate and appropriate

to meet uture market needs in Hong

Kong, with particular attention to the

developments and requirements in themainland China, as a result o the rapid

cross-border business integration.

. Building on the strength o the current

QP, the enhancements presented in this

in ormation paper should position our Hong

Kong CPA quali ication in solid standing,

ensuring it remains it or purpose over the

next decade. The enhanced QP should put

students and members in a stronger positionto tap career opportunities in both Hong

Kong and the mainland China.

2. Please re er to the Annex or a more

complete description o the whole enhanced

QP quali ying process. The Inst i tute

grate ully acknowledges the contribution

o those members, employers, academia,

graduates, students and other stakeholders

who generously gave their eedback to thedevelopment o the enhanced QP.

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Enhancements to the CPA quali cation programme3

Non-AccountancyDegree Holders

AccountancyDegree Holders

Certified Public Accountant

AATGraduates

ConversionProgramme

ProfessionalBridging

Examination

QP components- Pre-education entry- Professional accountancy education- Practical experience framework

-

1. Overview o the enhanced CPAquali ying process

. The Hong Kong Institute o Certi ied Public

Accountants (CPAs) is given the statutory

authority under the Pro essional Accountants

O r d i n a n c e t o a c c r e d i t a n d l i c e n s e

pro essional accountants in Hong Kong.

Those wishing to register as a CPA in HongKong are required to complete the Institutes

Quali ication Programme (QP) which entails

completing the QP training programme,

passing pro essional examinations and

acquiring practical experience under an

authorized employer / supervisor.

.2 The quali ying process or Hong Kong CPA

via the QP comprises three components:

the pre-entry education(accountancy degree holders, or conversionprogramme graduates or those holding

non-accountancy degrees, or pro essionalbridging examination graduates or sub-degree holders holding the AccreditedAccounting Technician (AAT) quali cation);

t h e p r o e s s i o n a l a c c o u n t a n c yeducation ( our modules and a inalexamination); and

the HKICPA practical experienceramework .

.3 The ollowing diagram illustrates the routes to quali y as a CPA through the QP:

Annex

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2. Pre-entry education

Accountancy degree holders

2. The basic educationa l quali i cation or

entry into the QP includes a recognized

accountancy degree with adequate coverage

in di erent elds o competencies.

2.2 The current graduate entry policy will stay

as it enables the Institute to be on a par

with the admission standards o leading

accountancy bodies and international

trends. It also recognizes the importance o

building on a broad based education and the

development o the oundation skills set by

tertiary institutions as partners in educating

and training uture pro essional accountants.

Non-accountancy degree holders

2.3 The Institu te recognize s the importa nt

contribution o non-accountancy degree

holders who wish to join the accountancy

pro ession. To sat is y the pre-entr y

educational requirement, non-accountancy

degree holders are required to ill the

technical knowledge gap by success ully

completing a conversion programme.

2. The compe tenc y r equ i r eme n t s o r

accountancy degrees and conversion

programmes have been enhanced. The

competency set consists o two parts:

technica l competencies and gener ic

qualities. It de ines the knowledge, values

and skills that candidates should possess at

the point o admission into the QP.

2.5 The technical competency requirements are

set in the ollowing areas:

Financial accounting Auditing In ormation management Management accounting Finance Taxation

2.6 The generic competency requirements are

set in the ollowing areas:

Intellectual qualities (in ormation technology pro ciency,language pro ciency, analytical thinkingand problem solving)

Commercial qualities(commercial acumen and China ocus,creativity and change orientation)

Intrapersonal qualities(integrity and pro essionalism, driveand resilience, execution and resultorientation)

Interpersonal qualities(leadership and teamwork, communicationand relationship building)

In respect o each o these ields, special

attention has been directed to the relevant

aspects o communicat ions , e th ics ,

in ormation technology, and mainland China

and international accounting and business.

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2.7 Covera ge o account ancy degrees and

conversion programmes which meet the

graduate competency standards or QP

admission are set out in Appendix I .

Consistent with degree level quali ication,

the graduate competency standards or QP

admission are benchmarked at the Education

Bureaus Quali cation Framework Level 5.

Sub-degree Holders

2.8 The Institute recognizes that sub-degree

holders represent a signi icant source o

manpower to the accountancy pro ession

and to Hong Kong. Although many will be

satis ed to pursue their careers on the basis

o their existing quali cations, some have the

incentive and ability to seek advancement,

via a vocational route, to become CPAs.

Sub-degree holders are accredited by the

Institutes subsidiary, the Hong Kong Institute

o Accredited Accounting Technicians

Limited (HKIAAT), or exemption to its

8-paper Accredited Accounting Technician

(AAT) Examinations.

2.9 It is important or the Institute to ensure

that only those sub-degree holders who areable to demonstrate an adequate level o

competency are admitted to the pro essional

bridging examination. The Hong Kong AAT

quali ication will continue to be used as a

benchmark or admission to the pro essional

bridging examination. The route or the AATs

to take a pro essional bridging examination

to satis y QP entry was created in 2002. This

public examination provides an opportunity

or able AATs to develop the generic skills

and technical knowledge gap to study QP.

The pro essional bridging examination is

also benchmarked at the Education Bureaus

Quali cation Framework Level 5.

2. 0 The compe tency re quirements or t he

pro essional bridging examination will beassessed in the orm o our examination

papers. These are:

Paper I PBE Financial accounting

Paper II PBE Managementaccounting and nance

Paper III PBE Auditing andin ormation systems

Paper IV PBE Business law and

taxation2. The syllabuses have been enhanced as part

o the New Quali cation Framework or the

Hong Kong AATs in 2007/08 and urther

re ined or consistency with the graduate

competency standards or QP admission

(Appendix I). The competency requirements

o the pro essional bridging examination, to

be administered by the HKICPA Examinations

Board, are set out in Appendix II .

2. 2 Apart rom HKIAAT members, graduates

o AAT examination who have not attained

HKIAAT membership may also attempt

the pro essional bridging examination.

However, they will be required to become

HKIAAT members be ore they can gain

admission to the QP.

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6

3. Pro essional accountancyeducation

3. The QP provides candidates with the

opportunities, through course work and

examinations as well as under the guidance

o workshop acilitators, to develop the

necessary application skills and competencies

which are essential or a competentpractitioner. It builds on the competencies

achieved through an accounting degree to

attain a postgraduate level o competencies.

The QP continues to comprise our core

modules and a nal examination.

Core modules

3.2 The core modules aim to enhance candidates

capacity to apply knowledge and skillsacquired at pre-education entry to pro essional

situations, and to develop a strong sense o

pro essionalisms and ethics. The ocus is on

integration across subject areas in the context

o pro essional applications.

3.3 The our core modules are:

Module A Financial reporting

Module B Corporate nancing Module C Business assurance

Module D Taxation

3. To better tailor to the needs o candidates,

al l our core modules wil l be o ered

concur ren t ly in two ses s ions , w i th

examinations held in June and December o

each year, with e ect rom September 20 0.

Candidates can select and take the our

modules in any order. However, a maximum

o two modules can be taken in each session.

3.5 C o m p l e t i o n o e a c h c o r e m o d u l e

requires about 20 hours o sel -studyusing study materials provided by the

Institute, satis actory attendance at and

participation in two prescribed ull-day

workshops and passing o an open-book

module examination.

Workshops

3.6 The workshops aim to develop candidates

ski l l s to research , so lve and analyzeproblems; apply their technical knowledge

in practical scenarios; learn rom the

experiences o their peers and workshop

acilitators; gain a better understanding

and urther insight o the learning materials

through discussion in workshops; and

develop cognitive skills, behaviour skills,

language and communication skills.

3.7 Each core module will have two ull-day

workshops over a span o weeks be ore

the module examination. The aggregate

contact hours or the two workshops will be

slightly increased to . Each workshop will

last or 8 hours with a one-hour lunch break.

Workshops will generally be conducted

during weekends.

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3.8 Each workshop will continue to be led by

two acilitators running a class size o no

more than 25 candidates. More ocus

will be given to develop generic skills by

involving candidates in group activities such

as ethical dilemma solving, negotiation skill,

enhancing presentation capability, case

study problem solving and analytical skill.

3.9 Workshops will no longer contribute marks

as part o the overall module assessment.

The ocus o the workshops will be directed

rom assessment to more ormat ive

development o skills. This should help

to groom the candidates, by removing

the perceived subjectivity in assessment

and enhancing the class dynamics or the

intended learning experience.

3. 0 Candidates are required to demonstrate

their success ul accomplishment o the

workshop objectives, via active participation,

as a prerequisite to sit the relevant module

examination.

Module examinations

3. Module examinations will continue to be a

three-hour open-book examination. The

open-book policy will stay as it replicates the

workplace where re erence materials are

readily available.

3. 2 Module ex aminations will continue to

comprise case questions and essay /

short questions which are all compulsory.

Candidates are expected to provide written

solutions which are comprehensive in

the appropriate ormat and written in

good English.

3. 3 To pass module examinations, a minimum

o 50% o the module examination marks is

required. There will be no aggregated mark

with workshop component as present, sincethe workshop assessment will comprise a

simple pass or ail under the enhanced

QP to determine eligibility or taking the

module examination.

Final examination

3. The i nal exami nation ai ms to provide

ormal veri ication that candidates who

have completed the our core modules candemonstrate a competent practitioner level

o per ormance. The ocus is on the ability

to deal competently with pro essional type

situations, involving the drawing together

and application o knowledge and skills

rom any part o the syllabus, across all elds

o competency.

3. 5 Candidates must pass all our core modules

to be eligible to take the nal examination.

3. 6 Final examination will continue to be a six-

hour open-book examination, to be taken

in two sessions (Papers I and II) in one day o

three hours each plus hal hour reading time.

Final examination will be held twice a year in

June and December.

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8

3. 7 Final examination will continue to comprise

case questions and essay / short questions

which are all compulsory. Candidates are

expected to integrate pro essional skills and

knowledge across all areas o accounting

and related elds in the analysis and solution

o complex pro essional problems.

3. 8 To pass inal examination, a minimum o50% o the aggregated marks or Papers I

and II is required.

Time limit

3. 9 The policy on completion requirements,

that candidates need to pass an individual

module within our attempts or within ive

years and a pass in the inal examination

within our attempts or within three years,has been removed.

3.20 However, the overall time limit to complete

QP remains the same. That is, the our core

modules and inal examination must be

completed within 0 years rom the date o

registration as a student with the Institute.

Syllabuses

3.2 The syllabuses covered in the our coremodules have been substantially re-written

under this major review exercise. The

Institute believes that the revision is needed

in order to ensure our registered students

and members are well-equipped with up-

to-date knowledge, skills and competencies

to serve the accountancy pro ession and

the public at large. Extensive reviews have

been done to ensure that not only are these

better align with the local market needs and

benchmark with international standards,

they are also more user- riendly by adopting

plain English.

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3.22 Module Changes rom existing syllabus

Financialreporting

An updated version to re lect the need or candidates to have a detailedunderstanding o the principles and practices in legal and inancial reporting

ramework, nancial reporting standards and examining their knowledge o theethical issues and current developments in nancial reporting.

Corporatenancing

A reduced version o the existing management accounting with the addition oelements o corporate nance, refecting the need or candidates to have goodknowledge o inancial management, treasury unction, inancial instruments,

business valuations and corporate restructuring. To re lect the change inemphasis o the module, the module will be rebranded as corporate nancing.

Businessassurance

A revised version to re lect the need or candidates to have a detailedunderstanding o the principles o assurance such as corporate governance,internal controls and risk management. To refect the actual coverage o topics,the module will be rebranded as business assurance.

Taxation An updated version to re lect the need or candidates to have a detailedunderstanding o the principles and practices in legal and tax ramework, taxcomputation and tax planning, and an awareness o China tax system.

3.23 The inal examinat ion wil l be mult i-disciplinary in nature, ocusing on the ability

to integrate knowledge and produce more

holistic business solutions. The syllabus

covered in the nal examination corresponds

to the competencies speci ied or the our

core modules.

3.2 The syllabuses or the our core modulesand the inal examination are set out in

Appendix III . They are benchmarked at the

Education Bureaus Quali cation Framework

Level 6.

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5. Transitional arrangements

5. The Institute is conscious o the need to

ensure that no registered students are

prejudiced by the new ramework. As such,

transitional arrangements will be put in place

or those registered students who are part

way through their studies to complete the QPwith the least amount o disruption possible.

5.2 The existing ramework will continue to

operate until May 20 0 session with module

examination in September 20 0. From

September 20 0, the new QP module will

be o ered, with its rst module examination

taking place in December 20 0.

5.3 The transitional arrangements are as ollows:

For students who have passed all our

modules and inal examination under

the old ramework, ull credit will be

awarded with a QP graduate certi cate.

For students who have remaining

module(s) or inal examination to

complete under the scheme to be

phased out, they will be required to

take the corresponding module(s) and

nal examination under the enhanced

QP with e ect rom September 20 0.

In other words, the passes students

have obtained or a module under the

old scheme will be deemed to be a pass

or the corresponding module(s) under

the enhanced QP.

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2

6. Enquiries

6. Please contact the Student Education &

Training Department o the Institute i you

have any queries regarding the enhanced QP:

Students

Mr. Chong Ho YinTel: 2287 70 0

email: [email protected]

Other stakeholders

Ms. Ava Ki

Tel: 2287 7280

email: [email protected]

6.2 A l ist o requently asked questions

i s a l so ava i l ab le rom our webs i t e :

http://www.hkicpa.org.hk/students(NEW)/

siteA/qp9-2.php.
http://www.hkicpa.org.hk/students(NEW)/siteA/qp9-2.phphttp://www.hkicpa.org.hk/students(NEW)/siteA/qp9-2.phphttp://www.hkicpa.org.hk/students(NEW)/siteA/qp9-2.php

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3

QP pre-entry educationcompetency requirements or degree holders(accountancy degrees and conversionprogrammes)

Appendix I

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Overview

This competency set consists o two parts: generic competencies and technical competencies. It de nes

the knowledge, skills and ability that candidates should possess at the point o entering the Hong Kong

Institute o Certi ed Public Accountants (HKICPA) Quali cation Programme (QP). This set is applicable to

entrants who are accounting graduates or graduates o conversion programmes.

Table o content

Generic competencies

The generic competency requirements are set in the ollowing areas:

Intellectual Qualities

Commercial Qualities

Intrapersonal Qualities

Interpersonal Qualities

Technical competencies

The technical competency requirements are set in the ollowing areas:

Financial Accounting

Auditing

In ormation Management

Management Accounting

Finance

Taxation

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Generic Competencies


In ormation technology profciency Is amiliar with various common computer so tware (e.g., word processing, spreadsheets,

presentation so tware, internet, email).

Language profciency Use English in both written and spoken context (e.g., presentation, discussion, report writing). Use Chinese in written orm and Putonghua to a level required by the China business

environment.

Analytical thinking and problem solving Research, access and integrate relevant in ormation or analysis. Evaluate di erent in ormation and apply analysis according to di erent contexts. Identi y the overall purpose o work tasks and establish links between pieces o work. Identi y problem and recognize its potential impact. Apply critical analysis and logical reasoning to issues and problems. Identi y, conceptualize and structure key issues and problems. Use decision sciences and quantitative models and techniques (e.g., statistics, SWOT, PESTE) to

solve problems and to accomplish tasks. Understand and consider constraints in problem solving. Show independence o mind and an inquisitive orientation. Analyze the situation and solve the problem independently as appropriate. Judge when to inquire urther in ormation or to seek others input to solve a problem. Judge when to report or escalate the problem to senior level or their attention and action.


Commercial acumen and China ocus Is aware o the legal and regulatory environment o business and other organizations, including

the law relating to business transactions, business entities and taxation.

Is aware o the economic environment o business, including the concepts and tools o macro andmicro economics.

Show basic understanding to other business unctions (e.g. marketing, market research andstrategies, operations management, services) and how they relate to the accounting unction.

See the relevance o and apply academic skills (e.g. analysis techniques, usage o gures anddata) to the business context.

Understand the social, economic, regulatory and political environment relating to businessorganizations in China.

Understand the regulatory environment o accounting in China.

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6

Creativity and change orientation Understand the need or change and is com ortable with changes. Demonstrate creative thinking in approaching tasks to do things better. Introduce new method to improve work process. Embrace li elong learning. Adapt to unstructured and un amiliar problems and situations readily. Describe the process o change to help others adapting to changes.


Integrity and pro essionalism Demonstrate personal integrity and adhere to ethical conduct in practice. Adhere to principles and values in practice. Adopt a pro essional approach to ul ll personal and social responsibilities.

Drive and resilience Demonstrate sel -initiative and motivation to get things done. Is committed to li e-long learning and continuous improvement. Is proactive in highlighting potential problems to senior level as appropriate. Show adaptability in approaching di erent people and situation. Handle stress ul work demand e ectively.

Remain composed to deal with challenges.Execution and result orientation Apply time management and prioritize work tasks to get things done. Set goals, objectives and implement actions to complete task on time and meeting expectation. Is reliable and consistent in delivering commitments. Monitor work progress and stay on track.


Leadership and teamwork Lead others to accomplish the common goal in teamwork. Provide direction and guidance to others to complete tasks. Understand organizational behavior and human resources management. Provide support to team members to nish tasks.

Communication and relationship building Present arguments and thoughts in a structured, logical and systematic way, to justi y the

outcome or solution proposed. Use laymans terms to explain technical accounting terms and concepts. Understand negotiation processes and infuence tactics. Establish productive working relationships with peers, supervisors and clients. Show active listening in interacting with peers, supervisors and clients. Interact with culturally and intellectually diverse people or groups in a global environment.

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Technical Competencies

Fields o competencyThe items listed in this section are shown with an indicator o the minimum acceptable level ocompetency, based on a three-point scale as ollows:

. AwarenessTo have a general academic awareness o the eld with a basic understanding o relevant knowledgeand related concepts.

2. KnowledgeThe ability to use knowledge to per orm tasks competently without assistance in straight orwardacademic situations or applications.

3. ApplicationThe ability to apply comprehensive knowledge and a broad range o skills in an academic setting tosolve most problems generally encountered.

Financial Accounting

Framework o fnancial accounting and reporting Explain the historical development o the accountancy pro ession and accounting

thought.

2

Explain the conceptual and theoretical basis o accounting. 2 Describe the legal and reporting ramework as it applies to nancial accounting in

Hong Kong.2

Describe the standard setting process and role o accounting standards, Hong Kongand International.

2

Describe the role o accounting guidelines and other pro essional pronouncements andexposure dra ts.

2

Describe the nancial reporting ramework and standard or small and medium-sizedentity.

2

Recording and presenting fnancial in ormation

Explain the in ormation needs o nancial decision makers and the role o accountingin ormation in addressing these needs.

3

Apply the relevant processes to identi y, gather, record, summarize and analyze nancialin ormation.

3

Identi y the components o primary nancial statements. 3 Account or transactions in accordance with Hong Kong Financial Reporting Standards. 3 Prepare nancial statements or individuals, unincorporated businesses, partnerships

and companies applying relevant guidance in relation to accounting treatment otransactions.

3

Prepare calculations or groups involving subsidiaries, associates and joint ventures. 3 Explain the eatures o in ormation systems (computerized and manual) which meet an

organizations external reporting requirements.3

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8

Ethics in fnancial reporting

Explain the ethical responsibilities or pro essional accountants in preparing nancialreports.

2

Understand orensic accounting and various misstatements arising rom raudulentnancial reporting.

Current issues and developments in fnancial reporting

Explain the corporate governance debate and its impact on nancial reportingdisclosures.

2

Discuss the disclosure requirements on directors remunerations, board composition,audit committee and their importance to corporate governance. 2

Understand the growing emphasis and the developing needs o corporate socialresponsibilities.

Understand the current issues in nancial reporting both in Hong Kong andinternationally.

Auditing

Nature and purpose o auditing Explain the conceptual and theoretical basis o auditing. 2 Explain the need or and nature o third party assurance. 2

Describe the legal and regulatory ramework governing the auditing pro ession inHong Kong.

2

Audit process and practice Identi y and explain audit objectives. 2 Explain the principles o collecting and assessing audit evidence. 2 Describe the approach to audit assignments including understanding the business,

audit risk, audit methodologies, evidence, materiality, risk assessment and internalcontrol.

2

Describe the nature o and need or an auditors report on nancial statements. 2

Pro essional standards and guidelines

Demonstrate an understanding o Hong Kong Standards on Auditing. 2 Demonstrate an understanding o the Institutes Code o Ethics or Pro essional

Accountants as it applies to auditors.2

Current issues and developments in auditing Discuss current issues in auditing both in Hong Kong and internationally. 2 Describe approaches to applying a corporate governance ramework and the impact

on auditing and the auditing pro ession.2

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In ormation Management

In ormation Explain the speci c in ormation needs o managers in di erent unctional areas o

an organization, including production, operations, marketing and sales, accounting,human resources and IT.

2

Explain the increasing roles and responsibilities o accountants as user and owner odata and the corporate in ormation system.

2

Describe the opportunities and threats to corporate in ormation system includingcapabilities in data treatment and analysis, data integrity, system security and issues inaccess restriction, and business contingency/continuity.

2

Describe the role o in ormation technology in solving business and accountingproblems.

2

Business systems Formulate appropriate in ormation systems strategies to support implementation o

business and unctional strategies.2

Use the system development li e cycle to plan, design, implement, and evaluate an ITsystem.

2

Describe the application o in ormation technology to accounting systems and thegeneration, reporting, internal control and attestation o accounting in ormation.

2

Recognize and understand the roles o accountants in all stages o the systemdevelopment li e cycle: systems analysis; systems design; systems implementation; andsystems operation and maintenance.

2

Financial in ormation Demonstrate an understanding o the behavioural issues o implementing in ormation

systems in organizations.2

Describe how change management can contribute to success ul implementation oin ormation systems.

2

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Management Accounting

Role and purpose o management accounting Explain the eatures and uses o business in ormation. 2 Describe the role o management accounting in organizations. 2 Describe theories and principles o management control. 2

Budgeting and orecasting Describe the principles o budgeting. 2 Prepare budgets and explain variances. 3 Prepare and explain orecasts and projections. 3

Cost accounting Explain the classi cation o costs and revenues. 2 Apply alternative costing techniques to products and services and explain variances. 3 Apply contribution analysis in decision making. 3

Per ormance measurement Identi y and explain per ormance measurement needs. 2 Calculate and explain the per ormance o products and business segments. 3 Describe the use o nancial and non- nancial indicators in per ormance measurement. 3

Describe the leading models o per ormance measurement system including triplebottom line management and balanced scorecard.

Pricing strategies and decisions State the actors a ecting pricing policies and describe pricing strategies. 2 Apply the di erent approaches o pricing products and services considering external

market actors and internal cost structures.3

Working capital management Describe the principles o working capital management. 2 Apply the procedures involved in working capital management to calculate the unding

requirements or working capital o di erent types o organizations.3

Strategic management accounting Explain current issues in strategic management accounting. 2 Explain the linkages between management accounting and the strategic management

o an organization.2

Describe the business planning processes including the development o corporatestrategic plans.

2

Explain organizational changes methodologies and processes and variations in businessmodels.

2

Describe strategic cost management techniques, including just-in-time (JIT) and totalquality management (TQM) concepts, product li e cycle costing, target costing, qualitycosting, theory o constraints and throughput analysis.

2

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Finance

Financial environment Describe the nancial environment in which an entity operates. 2 Describe the structure o Hong Kong equity and debt markets and its nancial and

banking system.2

Explain the role o treasury management and describe its responsibilities and activities. 2

Sources o fnance and capital structure Explain the di erent sources o nance. 2 Identi y and explain the advantages and risks associated with both debt and equity nance. 2 Explain and per orm calculations using the theory o capital markets including: port olio

theory; capital asset pricing model; cost o capital; Modigliani Miller theories; ande cient market hypothesis.

2

Understand the use o nancial products, including derivatives, in relation to corporatenancing and risk management.

Use o external expert or advisory on transaction services or und raising.

Capital investment appraisal Analyze strengths and weaknesses o di erent project appraisal techniques. 3 Apply di erent appraisal techniques to evaluate capital investment projects including

payback accounting rate o return net present value and internal rate o return.

3

Describe the impact o taxation, infation, risk and uncertainty in capital investment appraisal. 3

Financial orecasting and planning Prepare business plans or an organization. 2 Prepare cash fow and pro t projections or a business. 3

Financial analysis Identi y and calculate main stock exchange indicators. 2 Calculate and explain main ratios used in internal nancial management. 3

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Taxation

Overview o taxation system Describe the key aspects o the tax system in Hong Kong including tax administration. 2 Identi y the various types o taxation and tax bases applicable in Hong Kong. 2 Describe the criteria or ascertaining chargeability or all major taxes. 2 Explain basic tax planning issues. 2

Tax computation For straight orward transactions and situations, calculate and advise on tax liabilities

or individuals, unincorporated businesses, partnerships and companies arising rom:3

- Salaries tax;- Pro ts tax;- Stamp duty; and- Property tax.

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Appendix II

QP pre-entry educationcompetency requirements or sub-degree holders(pro essional bridging examination)

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2

Overview

This competency set consists o two parts: generic competencies and technical competencies. It de nes

the knowledge, skills and ability that candidates should possess at the point o entering the Hong Kong

Institute o Certi ed Public Accountants (HKICPA) Quali cation Programme (QP). This set is applicable to

entrants through Pro essional Bridging Examination.

Table o content


The generic competency requirements are set in the ollowing areas:






The technical competency requirements are set in the ollowing areas:

Paper I: PBE Financial Accounting

Paper II: PBE Management Accounting and Finance

Paper III: PBE Auditing and In ormation Systems

Paper IV: PBE Business Law and Taxation

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Generic Competencies


In ormation technology profciency Is amiliar with various common computer so tware (e.g., word processing, spreadsheets,

presentation so tware, internet, email).

Language profciency Use English in both written and spoken context (e.g., presentation, discussion, report writing). Use Chinese in written orm and Putonghua to a level required by the China business

environment.

Analytical thinking and problem solving Research, access and integrate relevant in ormation or analysis. Evaluate di erent in ormation and apply analysis according to di erent contexts. Identi y the overall purpose o work tasks and establish links between pieces o work. Identi y problem and recognize its potential impact. Apply critical analysis and logical reasoning to issues and problems. Identi y, conceptualize and structure key issues and problems. Use decision sciences and quantitative models and techniques (e.g., statistics, SWOT, PESTE) to

solve problems and to accomplish tasks. Understand and consider constraints in problem solving. Show independence o mind and an inquisitive orientation. Analyze the situation and solve the problem independently as appropriate. Judge when to inquire urther in ormation or to seek others input to solve a problem. Judge when to report or escalate the problem to senior level or their attention and action.


Commercial acumen and China ocus Is aware o the legal and regulatory environment o business and other organizations, including

the law relating to business transactions, business entities and taxation.

Is aware o the economic environment o business, including the concepts and tools o macro andmicro economics.

Show basic understanding to other business unctions (e.g., marketing, market research andstrategies, operations management, services) and how they relate to the accounting unction.

See the relevance o and apply academic skills (e.g., analysis techniques, usage o gures anddata) to the business context.

Understand the social, economic, regulatory and political environment relating to businessorganizations in China.

Understand the regulatory environment o accounting in China.

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Creativity and change orientation Understand the need or change and is com ortable with changes. Demonstrate creative thinking in approaching tasks to do things better. Introduce new method to improve work process. Embrace li elong learning. Adapt to unstructured and un amiliar problems and situations readily. Describe the process o change to help others adapting to changes.


Integrity and pro essionalism Demonstrate personal integrity and adhere to ethical conduct in practice. Adhere to principles and values in practice. Adopt a pro essional approach to ul ll personal and social responsibilities.

Drive and resilience Demonstrate sel -initiative and motivation to get things done. Is committed to li e-long learning and continuous improvement. Is proactive in highlighting potential problems to senior level as appropriate. Show adaptability in approaching di erent people and situation. Handle stress ul work demand e ectively.

Remain composed to deal with challenges.Execution and result orientation Apply time management and prioritize work tasks to get things done. Set goals, objectives and implement actions to complete task on time and meeting expectation. Is reliable and consistent in delivering commitments. Monitor work progress and stay on track.


Leadership and teamwork Lead others to accomplish the common goal in teamwork.

Provide direction and guidance to others to complete tasks. Understand organizational behavior and human resources management. Provide support to team members to nish tasks.

Communication and relationship building Present arguments and thoughts in a structured, logical and systematic way, to justi y the

outcome or solution proposed. Use laymans terms to explain technical accounting terms and concepts. Understand negotiation processes and infuence tactics. Establish productive working relationships with peers, supervisors and clients. Show active listening in interacting with peers, supervisors and clients. Interact with culturally and intellectually diverse people or groups in a global environment.

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. Awareness

To have a general academic awareness o the eld with a basic understanding o relevant knowledgeand related concepts.

2. KnowledgeThe ability to use knowledge to per orm tasks competently without assistance in straight orwardbusiness situations or applications.

3. Application

The ability to apply comprehensive knowledge and a broad range o skills in a business setting to solvemost problems generally encountered.

Paper I: PBE Financial Accounting

This subject aims to assess students detailed and in-depth understanding o the principles andpractices in certain more advanced areas in nancial reporting and examining their knowledge o theethical issues and current developments in nancial reporting.

Framework o fnancial accounting and reporting Describe the regulatory ramework in Hong Kong. 2 Identi y and explain the accounting theories and principles. 2 Describe the ramework or the presentation o the nancial statements. 2 Describe the inancial reporting ramework and standard or small and medium-sized

entity.2

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Accounting or business transactionsAccount or transactions in accordance with Hong Kong Financial Reporting Standards: Accounting policies, changes in accounting estimates and errors 3 Revenue 3 Government grants and assistance 2 Employee bene ts 2 Share-based payment 2 Inventories 2 Property, plant and equipment 3 Intangible assets 3 Investment property 3 Financial assets, nancial liabilities and equity instruments 2 Borrowing costs 3 Impairment o assets 3 Leases 2 Events a ter the reporting period 3 Provisions, contingent liabilities and contingent assets 2 Income taxes 2 The e ects o changes in oreign exchange rates 2

Related party disclosures 2 Non-current assets held or sale and discontinued operations 2 Earnings per share 3 Interim nancial reporting

Preparation and presentation o fnancial statements Describe the basis o preparation and presentation o nancial statements. 2 Understand the regulatory ramework o consolidated nancial statements. Prepare nancial statements in accordance with Hong Kong Financial Reporting Standards

or:- subsidiaries; 3

- investments in associates; and 3- interests in joint ventures. 3

Explain the eatures o in ormation systems (computerized and manual) which meet anorganizations external reporting requirements.

3

Ethics in fnancial reporting Explain the ethical responsibilities or pro essional accountants in preparing nancial

reports.2

Understand orensic accounting and various misstatements arising rom raudulentnancial reporting.

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Current issues and developments in fnancial reporting Explain the corporate governance debate and its impact on nancial reporting disclosures. 2 Discuss the disclosure requirements on directors remunerations, board composition, audit

committee and their importance to corporate governance.2

Understand the growing emphasis and the developing needs o corporate socialresponsibilities.

Understand the current issues in nancial reporting both in Hong Kong and internationally.

Paper II: PBE Management Accounting and Finance

This subject aims to test students ability to apply relevant management accounting and nancialmanagement principles and techniques in analyzing and providing business in ormation tomanagement or the purposes o planning, control, per ormance evaluation and decision-making.

Strategic management accounting ramework Understand the basic concepts o strategic management and corporate governance. Identi y and explain the processes in strategic management, including environmental

scanning and SWOT analyzes, value chain analysis, strategy ormulation, strategyimplementation, and evaluation and control.

2

Understand the objectives and roles (traditional and contemporary) o managementaccounting.

Understand the nature and e ectiveness o management and internal control systems. Apply the strategic cost management techniques, including just-in-time (JIT) and total

quality management (TQM) concepts, activity-based costing (ABC), product li e cyclecosting, target costing, quality costing, theory o constraints and throughput analysis.

3

Explain organizational changes methodologies and processes and variations in businessmodels.

2

Managerial decision making Apply relevant cost concept in decision making. 3 Apply di erent approaches o pricing products and services based on external market

actors and internal cost structure.3

Apply product, customer and supplier pro tability analysis based on pre-determined cost

behaviour ( xed, variable, activity-based).

3

Apply di erent trans er pricing methods, including cost-based, market-based andnegotiated trans er prices.

3

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In ormation or per ormance measurement Explain the advantages and disadvantages o decentralization in a sizable organization. 3 Identi y di erent types o responsibility centres, including cost centres, revenues centres,

pro t centres and investment centres, and explain how to evaluate the per ormance othese centres.

3

Prepare segment reports showing per ormance and pro tability o di erent segments. 3 Evaluate the limitations o nancial measures such as return on investments (ROI), residual

income (RI), economic value added (EVA).3

Explain and illustrate non- nancial measures and its relationship with nancial measures. 3

Describe the leading models o per ormance measurement system including triple bottomline management and balanced scorecard.

Financial management ramework Describe the objectives and scope o nancial management and its relationship with

nancial accounting and management accounting.2

Describe how the di erent objectives o multiple stakeholders create the agency problemin nancial management and the ways to solve these problems.

2

Identi y the nancial and non- nancial objectives o both or-pro t and not- or-pro torganizations.

2

Describe the characteristics o nancial and capital markets in Hong Kong and overseas. 2 Explain the e cient market hypothesis and its implications or nancial management. 3 Describe the role o treasury management and its responsibilities and activities. 2

Risk analysis and management Explain business (operating) risk and nancial risk and understand their respective

measurements.3

Evaluate the risk and return relationship or individual securities and a port olio osecurities, and the capital asset pricing model (CAPM).

3

Calculate the cost o equity, cost o debt and the weighted average cost o capital(WACC).

3

Capital investment appraisal Apply di erent appraisal techniques to evaluate capital investment projects. 3 Explain the e ects o and the approaches to deal with taxation, infation, risk and

uncertainty in capital investment appraisal.3

Apply the discounted cash fow analysis in making lease or buy decisions and assetreplacement decisions.

3

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Sources o fnance and capital structure Explain the di erent sources o nance. 2 Explain the advantages and disadvantages o both equity and debt nancing. 3 Illustrate the nancial implications o dividend policy and explain the arguments or and

against the relevancy o dividend policy.3

Explain and illustrate the impact o nancial gearing on the returns to shareholders. 3 Explain the theories o capital structure: Modigliani and Miller propositions and pecking

order theory.3

Understand the use o nancial products, including derivatives, in relation to corporate

nancing and risk management. Use o external expert or advisory on transaction services or und raising.

Working capital management Describe the nature and scope o working capital management and its relationship with

business insolvency.2

Calculate the unding requirements or working capital o di erent types o organizations. 3 Calculate and explain the measures o e ective working capital management, including

liquidity ratios and the length o operating cycle.3

Describe the techniques o managing working capital. 3

Financial analysis

Identi y and calculate main stock exchange indicators. 2 Calculate and explain main ratios used in internal nancial management. 3

Financial orecasting and planning Prepare business plans or an organization. 2 Prepare cash fow and pro t projections or a business. 3

Paper III: PBE Auditing and In ormation Systems

This subject aims to provide students with a general knowledge o the regulatory, legal and reportingramework o auditing in Hong Kong and an understanding o the basic principles o auditing. It

also aims to test students ability to understand in ormation as a key resource and asset o all kinds

o organizations and to appreciate how management in ormation systems with the appropriatetechnologies can create value and improve the competitive advantage o organizations.

AuditingNature and purpose o auditing Describe the roles and responsibilities o auditors. 3 Explain the statutory requirements or audits. 3 Distinguish between business ailure, audit ailure, and audit risk. 2 Discuss consideration o negligence and raud aced by auditors. 2 Describe auditors liability to clients and third parties. 2 Describe approaches to applying a corporate governance ramework and the impact on

auditing and the auditing pro ession.2

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Audit approachDemonstrate an understanding in the design o an audit approach. 2 Demonstrate an understanding o the importance o su cient and appropriate audit

evidence.2

Formulate the overall audit plan and audit programme. 2 Describe the use o audit sampling or tests o controls. 2 Describe the use o audit sampling or tests o details o balances. 2 Demonstrate an understanding o the audit o computerized systems. 2

Audit procedures Describe audit planning process and its documentation. 2 Explain the relationship between materiality and risk. 2 Describe the tests o controls and substantive tests o transactions applicable to the audit o :

- sales and collection; 2- purchase and payment; 2- payroll and personnel; 2- debtors and prepayments; 2- Inventory and production; 2- creditors and accrued liabilities; 2- xed assets; and 2- cash and cash equivalent and loan balances. 2

Demonstrate an understanding o the major actions involved during the completion o anaudit.

2

Audit report Describe the basis o audit reports. 2 Evaluate circumstances that require modi cation to a standard unquali ed audit report. 2 Evaluate circumstances that require the auditor to express quali ed opinions. 2 Explain the concept o true and air. 2

In ormation systems

In ormation systems development Demonstrate an understanding o in ormation systems strategies. 2 Describe systems development process. 2 Explain the increasing roles and responsibilities o accountants as user and owner o data

and the corporate in ormation system.2

Describe the opportunities and threats to corporate in ormation system includingcapabilities in data treatment and analysis, data integrity, system security and issues inaccess restriction, and business contingency/continuity.

2

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Paper IV: PBE Business Law and Taxation

This subject aims to provide students with an awareness o the overall legal ramework in whichbusinesses in Hong Kong operate so as to enable them to apply the relevant laws and practices tobusiness problems and practical situations. It also aims to test students ability to understand thetaxation system in Hong Kong and taxation computation and basic tax planning.

Hong Kong legal system Describe the need or law. 3 Describe the constitutional ramework applying in Hong Kong society. 3

Explain the di erences between legislation and case law. 2General principles o contract law Describe the e ects o di erent means o communications o acceptance. 3 Explain the meaning o intention to enter into legal relations. 3 Describe the e ect o illegality. 3 Explain the circumstances in which speci c per ormance and injunctions may be suitable

remedies.2

Law o Tort Describe the importance o the duty o care. 2 Explain the concepts o damages and de ences as they relate to negligence. 2

Describe employers liability, occupiers liability and vicarious liability. 2

Employment laws Explain the scope o the Employment Ordinance. 2 Identi y who is classi ed as an employee. 2 Explain the key provisions o the Employment Ordinance. 2 Describe the process o a hearing in the Labour Tribunal. 2 Explain the key provisions o Sex Discrimination Ordinance, Disability Discrimination

Ordinance and Family Status Discrimination Ordinance.2

Bribery and corruption laws Explain the scope o the Prevention o Bribery Ordinance. 2 Explain the key provisions o the Prevention o Bribery Ordinance. 2 Describe the role o the Independent Commission Against Corruption (ICAC). 2 Explain the obligations under the money laundering legislation. 2

The principal orms o ownership o business Explain the liability attaching to partners. 3 Explain the key provisions to be included in joint venture agreements. 3 Explain the concept o limited liability. 3 Explain the registration obligations under the Business Registration Ordinance. 3 Explain non-Hong Kong company provisions under Companies Ordinance. 3

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3

Company law: company ormation Describe the procedures in the ormation o a registered company. 3 Explain the relevance o the provisions contained in the companys memorandum. 3 Explain the content o Table A/other chosen Articles o Association. 3 Describe the requirements or record keeping. 3

Capital and fnancing o companies Di erentiate between di erent classes o share capital. 2 Distinguish between xed and foating charges. 2

Explain how a company may alter its share capital. 2 Explain the priority o di erent types o charges in the event o receivership and winding

up.2

Explain the importance o maintenance o capital. 2

Administration o companies Describe how directors are appointed and removed. 3 Explain the duciary duties o directors. 3 Explain the duty o care and skill owed by a director to his company. 3 Distinguish between the business o the company decided by directors and matters

requiring the approval o the shareholders in general meeting.2

Liquidation Describe the types o liquidation. 3 Explain the roles o liquidators. 3 Describe the procedures or liquidation. 3

Overview o taxation system Describe the key aspects o the tax system in Hong Kong including tax administration. 2 Describe the various types o taxation and tax bases applicable in Hong Kong. 2 Describe the criteria or ascertaining chargeability or all major taxes. 2 Explain basic tax planning issues. 2

Tax computation For straight orward transactions and situations, calculate and advise on tax liabilities or

individuals, unincorporated businesses, partnerships and companies.3

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QP education competency requirements(modules and fnal examination)

Appendix III

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Overview

Quali ication Programme (QP) comprises our modules and a inal examination. The coverage o each

module is de ned in competency-based terms. Competencies are set at the level o the newly-quali ed

pro essional accountant. Each unit o competency within a module is listed, together with an indication o

the main related areas o skills and knowledge. Each o these is assigned a numerical indicator as a guide

to the applicable level o competency.

Table o content

The modules and nal examination competency requirements are set in the ollowing areas:

Module A: Financial Reporting

Module B: Corporate Financing

Module C: Business Assurance

Module D: Taxation

Final Examination

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. Awareness

To have a general pro essional awareness o the eld with a basic understanding o relevant knowledgeand related concepts.

2. Knowledge

The ability to use knowledge to per orm pro essional tasks competently without assistance in

straight orward situations or applications.3. Application

The ability to apply comprehensive knowledge and a broad range o pro essional skills in a practicalsetting to solve most problems generally encountered in practice.

Module A Financial Reporting

Legal environmentDescribe the Hong Kong legal ramework and related implications or business activities: Types and relative advantage o alternative orms o organization 2 Legal procedures or establishment and governance o companies 2

Describe the obligations o directors and o cers o companies: Powers, duties and obligations o directors and company secretaries 2

Describe the legal requirements associated with company structure, share o erings, debt obligationsand restructuring: Share issues and prospectus requirements 2 Debt instruments and registration o charges 2 Statutory reporting and documentation requirements 3 Appointment and removal o auditors 3 Restructuring, including appointment o receivers and liquidators

Financial reporting rameworkDescribe the nancial reporting ramework in Hong Kong and the related implications or business activities: The role and setting o accounting standards 2 Hong Kong Financial Reporting Standards 2 Small and Medium-sized Entity Financial Reporting Framework and Financial Reporting Standard 2 Code o Ethics or Pro essional Accountants 3 Hong Kong (IFRIC) Interpretations, Hong Kong Interpretations and Hong Kong (SIC)

Interpretations2

Other pro essional pronouncements and exposure dra ts 2 Regulatory bodies and their impact on accounting 2 Accounting principles and conceptual rameworks 2 Current developments 2

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Accounting or business transactionsAccount or transactions in accordance with Hong Kong Financial Reporting Standards: Accounting policies, changes in accounting estimates and errors 3 Revenue 3 Government grants and assistance 3 Employee bene ts 2 Share-based payment 2 Inventories 3 Construction contracts 3

Property, plant and equipment 3 Intangible assets 3 Investment property 3 Financial assets, nancial liabilities and equity instruments 2 Borrowing costs 3 Impairment o assets 3 Leases 3 Events a ter the reporting period 3 Provisions, contingent liabilities and contingent assets 3 Hedge accounting 2 Income taxes 2

The e ects o changes in oreign exchange rates 2 Related party disclosures 3 Non-current assets held or sale and discontinued operations 3 Earnings per share 3 Operating segments 3 Interim nancial reporting 3

Preparation and presentation o fnancial statementsPrepare the nancial statements or an individual entity in accordance with Hong Kong FinancialReporting Standards and statutory reporting requirements: Primary nancial statement preparation 3 Financial statement disclosure requirements 3

Prepare the nancial statements or a group in accordance with Hong Kong Financial ReportingStandards and statutory reporting requirements: Principles o consolidation 3 Acquisition o subsidiaries 3 Disposal o subsidiaries 3 Business combinations 3 Investments in associates 3 Interests in joint ventures 3 Primary nancial statement preparation 3 Financial statement disclosure requirements 3

Merger accounting or common control combinations 2

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Module B Corporate Financing

Strategic managementAnalyze and advise upon an organizations strategy: Strategy ormation process, including data gathering structures, SWOT analysis and

PESTE analysis3

Project appraisal techniques and process 3 Post-appraisal audit o projects 3

Per ormance control

Design, implement and review o per ormance measurement and control systems in organizations: Per ormance measurement systems 3 Per ormance indicators and measures or organizational units 3 Cost measurement and analysis in service and manu acturing environments 2 Management o intra- and inter-organizational relationships 2 Behavioural and ethical aspects o control systems 3

Financial analysisAnalyze and advise upon an organizations nancial strategy: Business plans 2 Cash fow statements 3

Pro tability projections 3 Liquidity and solvency positions 2 Sensitivity analysis 3

Short and medium term fnancial managementIdenti y and evaluate the short and medium term nancial requirements o an organization: Cash management and orecasting 3 Financial markets 2 Working capital management 3

Treasury unctionOutline the objectives and operation o a treasury unction in an organization:

Objectives and internal management 2 In ormation systems internal and external 2 Controls 2 Governance, audit and reporting 2 Relationship management 2

Long term fnancial managementIdenti y and evaluate the long term nancial management position o a business and advise onrelevant sources o nance and unding methods: Capital structure 3 Cost o capital 3 Dividend decisions 3 Raising nance 2 Corporate debt securities 2

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0

Risk identifcation and managementIdenti y risks which a business is exposed to and apply appropriate risk management strategies: Concept o nancial risk and return 3 Identi cation and evaluation o business and nancial risk 3 Measurement o risk 2 Risk management including the use o nancial products, including derivatives 2

Business valuationsPer orm calculations and provide advice relating to the valuation o businesses:

Company valuations 2 Mergers and acquisitions 2 Disposals 2

Business combinationsDiscuss possible reasons or business combinations and the perceived advantages and disadvantages: Regulation o takeovers and mergers 2 Due diligence 2 Context o takeover bid 2 Role o the pro essional adviser 2

Regulatory environmentDiscuss the regulatory environment and where appropriate apply ethical standards and pro essionaland industry guidance: The Institutes Code o Ethics or Pro essional Accountants 2 Industry codes o conduct 2 Stock Exchange regulation and reporting requirements 2

Business ailure and insolvencyIdenti y and explain the key issues relating to business ailure and insolvency: Key actors which lead to business ailures 2 Common nance and treasury problem areas 2 Provision o basic advice on insolvency 2

Corporate reorganization and changeIdenti y and explain the key issues relating to methods o change to corporate structures: Divestment 2 Demerger 2 Public to private (delisting) 2 Management buy-out and mechanics 2 Alterations to capital 2

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Module C Business Assurance

Pro essional standards and guidanceIdenti y and where appropriate apply ethical standards, legislation and pro essional guidance: The Institutes Code o Ethics or Pro essional Accountants 3 Pro essional Standards and guidance 3 Legal and regulatory ramework governing the pro ession 3

Assurance engagementsApply relevant Hong Kong Standards on Quality Control, Auditing, Assurance and Related Services,guidance and legislation to plan, per orm and complete assurance engagements including the auditso nancial statements with emphases on: Audit requirements or a complete set o general purpose nancial statements 3 Other assurance engagement requirements 2 Client and engagement acceptance procedures 3 Audit methodologies 3 Planning and risk assessment 3 Quality control considerations 3 Documentation 3 Materiality 3

Audit procedures 3 Audit evidence 3 Internal audit 2 Completion procedures 3 Reporting 3

Corporate governanceDescribe current developments and issues in corporate governance and explain the impact that willhave on management, assurance engagements and auditors responsibilities: Background to corporate governance developments 2 Key issues relating to corporate governance including directors remunerations, board

composition, audit committee and non-controlling interest2

Managements responsibilities to comply with corporate governance requirements and toimplement related practices

3

Auditors responsibilities to consider and address corporate governance requirements 3 Implications o overseas legislation such as Sarbanes-Oxley Act on HK companies and

auditors2

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2

Computerized business systemsDiscuss the eatures o computerized business systems and assess and advise on risk and control

rameworks: Key eatures o a computerized business system 3 Categories and types o controls 3 Impact o increasing use and share o ownership by accountants in corporate in ormation

system2

Impact o e-commerce 3 Opportunities and threats to corporate in ormation system including capabilities in data

treatment and analysis, data integrity, system security and issues in access restriction,and business contingency/continuity

2

Risk and control ramework 3 Internal audit 3 System change processes 2 Risk assessment and evaluation o IT processes 2

Module D Taxation

Overview o the taxation system and administration o taxesDescribe the key aspects o the tax system in Hong Kong: Principles o taxation 2

Types o tax 2 Structure and procedures o Inland Revenue Department 2 Duties and powers o o cers o Inland Revenue Department; o cial secrecy 2 Duties and liabilities o a taxpayer or his agent or an executor 2 Sources o Hong Kong tax law statute, case law, Board o Review decisions 3 Interpretation o tax statutes 3 The Basic Law 3 Departmental interpretation and practice notes 3 Returns, o ences and penalties 2 Assessments, additional assessments and provisional assessments 3 Payment, recovery, hold-over and re und o taxes 2 Objections and appeals 3 Board o Review 3 Board o Inland Revenue 2 Tax investigation 2

Taxes in Hong KongInterpret and apply rules o major taxes as they impact and interact on transactions, individuals andorganizations and ascertain related tax liabilities:

Tax on property income: Scope o property tax charge 2 Chargeable property and owners o land and/or buildings 2 Ascertainment o assessable value and property tax liability 3

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Salaries tax on employees and directors: Scope o salaries tax charge 2 Expenses and deductions 3 Time basis assessment 3 Personal allowances 2 Bene ts in kind, housing bene t, share options 3 Treatment o lump sum receipts and losses 2 Separate taxation on spouses and joint assessment 2 Ascertainment o salaries tax liability 3

Personal assessment: Election or personal assessment 2 Computation o total income and tax payable 2

Taxation o businesses: Scope o pro ts tax charge 3 Badges o trade 3 Source o business pro ts 3 Deemed trading receipts 3 General deductions and speci c deductions 3 Distinction between capital and revenue items 2 Computation and treatment o losses 2 Post cessation receipts and payments 2 Sharkey v. Wernher principle 2 Financial instruments 3 Exemption or o shore unds 3 Ascertainment o pro ts tax liability 3 Partnerships and allocation o pro t/loss 2 Depreciation allowances: plant and machinery 2 Depreciation allowances: industrial buildings and commercial buildings 2 Arrangement between the Mainland o China and HKSAR 3

Stamp duty: Scope o charge 2 Conveyance on sale o immovable property 3 Agreement or sale o residential immovable property 3 Lease o immovable property 3 Hong Kong stock 3 Voluntary disposition inter vivos 3 Exemptions and relie s 3 Adjudication, assessment and administration 2 Stamp duty planning 3

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Tax planning: Anti-avoidance provisions in the Inland Revenue Ordinance 3 Ramsay principle 3 O ences and penalties 3 Advance ruling 2 Double taxation relie 2 Hong Kong tax planning 3

Tax and the pro essional accountant

Describe the role o the Pro essional Accountant in tax management: Pro essional and ethical standards 3 Relationship with tax authority and the law 2

Overview o China tax systemUnderstand the key aspects o the tax system in China: Overview o China tax system including VAT, consumption tax and business tax

Final Examination

On completion o the education programme or the Final Examination candidates will be able to: Integrate and apply the knowledge and skills developed in the individual module

syllabuses. Develop appropriate pro essional solutions to multi- aceted problems using skills in

judgement, analysis, communication and presentation. Communicate and present solutions to business problems in an appropriate ormat. Formulate advice appropriate to the circumstances. Demonstrate an understanding o the undamental principles o ethics and related

decision making. Apply the code o ethics to di erent business circumstances.

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5

QP Practical experience competencyrequirements

Appendix IV

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6

Overview

This competency set extends the competency requirements already applied to prerequisite academic

quali ication and the Quali ication Programme (QP) to the daily work o the registered students. Both

technical or accounting-related and broader generic competencies such as communication skills are

de ned. Provision is made or the widest possible range o eligible practical experience, while still retaining

a common core in the undamentals o accounting.

Table o content


The main technical areas where experience is gained are: Financial accounting and external reporting Auditing and internal auditing Financial management Taxation

In addition, three other areas are also de ned as areas where a signi cant proportion o members gainedpractical experience: Management accounting In ormation management and technology Insolvency

Competency standards are de ned in terms o : the stage o completion o the period o practical experience (two categories: basic and principal);

and the level o attainment o the skill (three levels: supervised, independent and leader).


In addition to the technical competencies, registered students will have to acquire generic skills during thecompletion o basic and principal levels o practical experience.

These generic competencies are grouped into the ollowing skill areas: Creative thinking, reasoning and analysis Communications and interpersonal relationships Organization-speci c competencies Personal and behavioural In ormation technology

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Competencies Framework


Practical Experience ComponentsCompetency requiredFundamentals o accounting *3 out o 4 units have to be attained. Minimum

Level attained

Unit BasicAble to identi y and apply relevant accounting standards andpronouncements to a given task or situation relating to the preparation,presentation and reporting o in ormation, both past and projected

I

Examples Maintain awareness o all accounting standards and pronouncements. Identi y standards and pronouncements relevant to the individual situation. Apply relevant standards and pronouncements appropriately to the task.

2 Able to prepare or analyze the annual reports o a company or othersubstantial organizations, including determination o accounting policies,appropriate selection and verifcation o input data, presentation andcompliance, within required time rames

S

Examples Determine the accounting policies o the organization. Evaluate in ormation systems required to provide required input data or

reliability, timeliness and completeness. Select appropriate data and prepare reports in required ormat. Arrange dissemination o reports in accordance with requirements and policies.

3 Able to evaluate accounting and in ormation systems I

Examples Review and analyze speci cations o in ormation systems. Review operation o in ormation systems and evaluate reliability o outputs. Understand source and methods o acquiring necessary inputs. Maintain ability to operate in ormation systems e ectively and to evaluate

speci c outputs required.

Able to analyze and explain variances between budgeted and actualfnancial results, including appropriate use o non-fnancial indicators

I

Examples Understand basis or preparation o projected results. Veri y actual results and compare with projected results to identi y variances. Analyze individual actors responsible or each signi cant variance, including

non- nancial infuences, and reconcile both sets o results. Report and explain ndings in a orm appropriate to the organization

concerned.

Key: S = Supervised; I = Independent; L = Leader

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Practical Experience ComponentsCompetency required

Financial accounting and external reporting MinimumLevel attained

Unit Basic Principal

Able to apply accounting standards I I

Examples Maintain awareness o all accounting standards and pronouncements. Identi y standards and pronouncements relevant to the individual task.

Apply relevant standards and pronouncements appropriately to the task. Understand and maintain a current knowledge o the source o all reportingrequirements.

Identi y potential areas o confict or ambiguity in applying the variousrequirements.

2 Able to prepare annual reports or fnancial statements S

Examples Determine the external reporting policies o the organization. Evaluate in ormation systems required to provide required input data or

reliability, timeliness and completeness. Select appropriate data and prepare reports in required ormat. Arrange dissemination o reports in accordance with requirements and

policies.

3a Able to evaluate accounting and in ormation systems I I

Examples Review and analyze speci cations o in ormation systems. Review operation o in ormation system and evaluate reliability o outputs. Understand source and methods o acquiring necessary inputs. Maintain ability to operate in ormation system e ectively and to evaluate

speci c outputs required.

3b Able to develop accounting and in ormation systems which meet anorganizations fnancial reporting requirements

I

Examples Maintain an awareness o the curr

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