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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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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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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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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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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: ychong@hkicpa.org.hk
Other stakeholders
Ms. Ava Ki
Tel: 2287 7280
email: avaki@hkicpa.org.hk
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.
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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
Intellectual Qualities
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 Qualities
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.
Intrapersonal Qualities
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.
Interpersonal Qualities
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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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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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
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:
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
Intellectual Qualities
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 Qualities
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.
Intrapersonal Qualities
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.
Interpersonal Qualities
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:
. 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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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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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:
. 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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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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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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QP Practical experience competencyrequirements
Appendix IV
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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
Technical competencies
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).
Generic competencies
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
Technical Competencies
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