Professional Accounting Training Program (FTMS International)

 

The Hong Kong Institute of Certified Public Accountants (HKICPA) is the only body authorized by law to register and grant practicing certificates to certified public accountants in Hong Kong. It has around 46,000 members and more than 17,000 registered students. The Institute evolved from the Hong Kong Society of Accountants, which was established on 1 January 1973 by the Professional Accountants Ordinance. In order to become the member of HKICPA, one needs to go through a combination of examination and working experience.

 

Examination

 

The Qualification Programme (QP) is a comprehensive training program that provides the knowledge and skills necessary to become a certified public accountant (CPA). QP builds on an accounting degree and progresses to course work and examinations -- the knowledge side of the pyramid. On the practice side, the students will participate in workshops that simulate issues they will face at work as a CPA.

 

QP comprises four modules and final examination. The four modules aim to enhance candidates' capacity to apply knowledge and skills acquired at the pre-education entry to professional situations, and to develop a strong sense of professionalisms and ethics. The focus is on integration across subject areas in the context of professional applications. The coverage of each module is defined in competence-based terms. Competences are set at the level of a newly-qualified professional accountant.

 

For each module, the students need to complete two full-day workshops led by experienced facilitators (each workshop lasts eight hours including a one-hour meal break) and pass a three-hour open-book examination.

 

Completion of the workshop is a prerequisite to sit the module examination of the relevant module.  The students are required to demonstrate their successful accomplishment of the workshop objectives, via active participation.  The students are required to demonstrate the development of the intended learning objectives by attaining at least 70% of the development indicators for satisfactory completion of workshops.

 

Module A: Financial Reporting

 

In this module, the students will learn the principles and practices of financial reporting, including professional accounting standards, financial accounting and external reporting. They will gain a full understanding of how financial reporting affects business activities, business transactions and the preparation of financial statements at both individual company and group levels.

 

The syllabus starts with the Hong Kong legal framework and related implications for business activities, the obligations of directors and officers of companies and the legal requirements associated with company structure, share offerings, debt obligations and restructuring. It follows with the financial reporting framework in Hong Kong, including the Hong Kong Financial Reporting Standards, Small and Medium-sized Entity Financial Reporting Framework and Financial Reporting Standard, Hong Kong Financial Reporting Standard for Private Entities, Code of Ethics for Professional Accountants and Hong Kong (IFRIC) Interpretations, Hong Kong Interpretations and Hong Kong (SIC) Interpretations, and the related implications for business activities.

 

The syllabus then focuses on topics needed for the preparation of the financial statements for an individual entity in accordance with Hong Kong Financial Reporting Standards and statutory reporting requirements. This includes the primary financial statement preparation and financial statement disclosure requirements. The last section of the syllabus requires the candidates to learn how to prepare the financial statements for a group in accordance with Hong Kong Financial Reporting Standards and statutory reporting requirements. It includes the principles of consolidation, acquisition and disposal of subsidiaries, business combinations, investments in associates, interests in joint arrangements, consolidated financial statement preparation, financial statement disclosure requirement and merger accounting for common control combinations.

 

Module B: Corporate Financing

 

This module provides the students with a detailed knowledge of corporate financing, including strategy formation, performance evaluation, financing options, business valuation and corporate restructuring. The students will learn the analytical tools needed to help business maximize corporate value, manage financial risks and make successful financial decisions.

 

The syllabus covers a wide variety of topics, such as strategic management where the candidates should be able to analyse and advise upon an organisation's strategy and performance control where the candidates should be able to design, implement and review of performance measurement and control systems in organisations. It also includes financial analysis where the candidates should be able to analyse and advise upon an organisation's financial strategy. The concept of short, medium term and long term financial management followed. The candidates should be able to identify and evaluate the financial management position of a business and advise on relevant sources of finance and funding methods.

 

The syllabus then covers risk management. The candidates should have the competence of identifying risks which a business is exposed to and apply appropriate risk management strategies. The concepts of business valuations and business combinations are included as well. The candidates should learn to perform calculations and provide advice relating to the valuation of businesses and discuss possible reasons for business combinations and the perceived advantages and disadvantages.

 

In addition, the regulatory environment is included in the syllabus where the candidates are required to discuss the regulatory environment and where appropriate apply ethical standards and professional and industry guidance, such as the Institute’s Code of Ethics for Professional Accountants, industry codes of conduct, integrated reporting and related Stock Exchange regulation and reporting requirements. The last section of the syllabus is related to business failure and insolvency, and corporate reorganisation and change. The candidates will learn to identify and explain the key issues relating to business failure, insolvency and the methods of reorganization and change to corporate structures.

 

Module C Business Assurance

 

This module explains the principles and practices of business assurance. The students will learn how to assess the risks a business faces and perform an effective assurance assignment. The module also addresses the growing concerns of internal controls and corporate governance, and explains how these impact on management, assurance engagements and auditors’ responsibilities.

 

The syllabus starts with the professional standards and guidance where the candidates are expected to identify and where appropriate apply ethical standards, legislation and professional guidance such as the Institute’s Code of Ethics for Professional Accountants and legal and regulatory framework governing the profession to the question scenario. It will then follow with the assurance engagement. The candidates should apply relevant Hong Kong Standards on Quality Control, Auditing, Assurance and Related Services, guidance and legislation to plan, perform and complete assurance engagements including the audits of financial statements.

 

The syllabus also includes the topic of corporate governance. It describes the current developments and issues in corporate governance and explain the impact that will have on management, assurance engagements and auditors’ responsibilities. The implications of overseas legislation such as Sarbanes-Oxley Act 2002 on Hong Kong companies and auditors will be discussed as well. The last topic of the syllabus is computerised business systems where the candidates should be able to discuss the features of computerised business systems and assess and advise on risk and control frameworks.

 

Module D Taxation

 

This module not only explains the Hong Kong taxation system, but also provides an awareness of the tax system in China. The students will learn to identify potential tax issues, assess tax liabilities and provide appropriate tax advice for individuals and organizations.

 

The syllabus starts with an overview of the taxation system and administration of taxes in Hong Kong. It describes the key aspects of the tax system such as the sources of Hong Kong tax law – statute, case law, Board of Review decisions, the Basic Law and the Departmental Interpretation and Practice Notes and Stamp Office Interpretation and Practice Notes. The syllabus then covers the tax laws in Hong Kong where the candidates learns how to interpret and apply rules of major taxes as they impact and interact on transactions, individuals and organisations and ascertain related tax liabilities, including the tax on property income, salaries tax on employees and directors, personal assessment, taxation of businesses and stamp duty.

 

The syllabus then covers the concepts of tax planning where the anti-avoidance provisions in the Inland Revenue Ordinance, the Ramsay principle, offences and penalties, advance ruling, double taxation relief and Hong Kong tax planning are included. A brief discussion of the role of the professional accountant in tax management will follow. The last topic of the syllabus is an overview of China tax system where the candidates will learn the key aspects of the tax system in China.

 

Final exam

 

After successful completion of the four modules, the students will take a six-hour open book final examination (to be taken in two sessions of three hours for each three-hour session of examination plus half hour reading time).

 

Final examination aims to provide formal verification that students who have completed the four modules can demonstrate a competent practitioner level of performance. The focus is on the ability to deal competently with professional type situations, involving the drawing together and application of knowledge and skills from any part of the syllabus, across all fields of competence.

 

Experience

 

In addition to completing the QP examination, students need to acquire at least three years of relevant experience under an Institute-authorized employer or supervisor complying with the Institute's requirements in order to qualify for membership.