...Chapter 3 Substance of Transactions 1. Objectives 1.1 Understand the meaning of substance of transactions. 1.2 Understand and apply the principle of substance over form. [pic] 2. Introduction 2.1 Both the HKICPA’s framework and HKAS 1 state that transactions and events should be accounted for and presented in accordance with their substance and economic reality, and not merely their legal form. 2.2 As yet the HKICPA does not have one standard that brings together all aspects of substance over form. However, many existing standards base their accounting treatment on the concept of substance over form. 2.3 The basic thrust is that the substance of a transaction should be determined by identifying all aspects and implications and giving priority to those more likely to have a commercial effect in practice. This usually means considering the effect of the transaction on the assets and liabilities of the enterprise. Therefore, it is important to be clear on exactly what is meant by the term “asset” and what is meant by the term “liability”. 3. Off Balance Sheet Finance (不入帳的融資) (A) The advantages perceived from schemes of off balance sheet finance |3.1 |Definition | | |Off balance finance is the organization of transactions such that financial commitments are not included in the | | |statement of financial position of a company...
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...Audit and Assurance Services Chapter 1 1 Learning Objectives 1. What is auditing? Distinguish between auditing and accounting. Importance of auditing in reducing information risk. 2. Distinguish audit services from other assurance and non-assurance services provided by CPAs. 3. Three main types of audits. 4. How to become a CPA? Identify the primary types of auditors. 2 What is auditing? Evaluating 3 Nature of Auditing Auditing is the accumulation and evaluation of evidence about information to determine and report on the degree of correspondence between the information and established criteria. Auditing should be done by a competent, independent person. 4 Audit Reporting -- (Expressing Opinions) The final stage in the auditing process is preparing the Audit Report, which is the communication of the auditor’s findings to users. 5 Information and Established Criteria To do an audit, there must be information in a verifiable form and some standards (criteria) by which the auditor can evaluate the information. 6 Accumulating Evidence and Evaluating Evidence Evidence is any information used by the auditor to determine whether the information being audited is stated in accordance with the established criteria. Transaction data Client inquiry Written and electronic Communications with outsiders Observations 7 Competent, Independent Person The auditor must be qualified...
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...Education + Training A multilevel study of students’ motivations of studying accounting: implications for employers r Fo Journal: Manuscript ID: Manuscript Type: Education Training ET-Feb-2011-0011.R3 Research Paper Pe Keywords: education, industry er ew vi Re Page 1 of 26 A multilevel study of students’ motivations of studying accounting: implications for employers Abstract Purpose This study examines the influence of factors affecting students’ choice of accounting as a study major in Hong Kong. r Fo Design/methodology/approach Multinomial logistic regression and Hierarchical Generalized Linear Modeling (HGLM) are used to analyze the survey data for the level one and level two data, which is the first time such an approach has been used in the literature. Twenty semi- Pe structured interviews are conducted. Findings er Results reveal that parental influence has the highest explanatory power among all three groups of students (i.e. accounting major, accounting minor, and other majors). Re This finding reflects the inculcation in students of the Confucian cultural norms ingrained in Chinese societies. Intrinsic interest is the second most important vi influencing factor reported by students. Two factors, “intrinsic interest” (attitude towards the behavior) and “parental influence” (subjective norm) in the multinomial ew 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 ...
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...Financial department plays an important role in the company, so accounts should be careful about their jobs. The job specifications of accountant: the basic requirement of accountant is required the degree in Accounting or Financial. In addiction, the professional examinations like ACCA or HKICPA or equivalent and at least 2 years experiences is preferred. Moreover, he or she should proficient in MS Office and knowledge in accounting software like Peachtree is a plus. The duties of financial including financial reporting, cooperate finance, business assurance and taxation. There is few conditions to determine whether recruit or not. First of all, talk about character, whether auditing or accounting, the work is drilling in the digital pile, there is not enough patience is not done. Therefore, not afraid of nausea, more tolerate of applicant is more suitable for accountants. In addiction, the accountant have to face the complicated accounts and accounting, it has a good organizational and analytical capabilities, as well as the applicant...
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...CEC International Holdings Limited Listed company on HKSE (759) From an investor point of view, CEC International Holdings Limited (CEC) has been doing good in business in maximizing profit, however the operation efficiency and liquidity need to have some improvements. The financial statements are prepared in accordance with Hong Kong Accounting Standard (“HKAS”) issued by the Hong Kong Institute of Certified Public Accountants (“HKICPA”) and has been consistently used throughout all financial years. The framework used to develop the financial statements is the indirect method, which discloses an overall summary (consolidated financial statements) then follows by detail breakdown of individual items such as the change in capital assets, which is a widely adopted way of presentation. CEC has changed its core business from electronic components manufacturing to retail since 2010, which has a higher profit margin and is the major profit contributor now. From 2011 onwards the cost of sales to revenue ratio reduced from 82% down to 76% then to 72% showed a great improvement in controlling the operation efficiency, eventually contributing to the gross profit. The ROSF and ROCE first dropped from 2011 to 2012, then slightly back up again in 2013. The cause of the drop may be because of the investment at early stage of business change whereby the return of investment has not been accounted. However, the operating profit margin and EBITDA margin were kept lowering. The selling...
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...Outline Part 1 Background and Overview Part 2 US GAAP and IFRS Part 3 China GAAP and IFRS Part 4 Summary of Convergence Process Part 5 Pros & Cons of Convergence Part 6 The reasons for differences in accounting practice ww.ifrs.org + The International Accounting Standards Board + The International Accounting Standards Committee (IASC) Foundation + Objective – a single set of global financial reporting standards + Aim – convergence between national standards and international standards + IFRS Framework + IFRS SMEs + Supported by the Group of 20 Leaders (G20) who, at their September 2009 meeting in Pittsburgh, US. Country Status for listed companies as of April 2010 Argentina Required for fiscal years beginning on or after 1 January 2011 Australia Brazil Canada Required for all private sector reporting entities and as the basis for public sector reporting since 2005 Required for consolidated financial statements of banks and listed companies from 31 December 2010 and for individual company accounts progressively since January 2008 Required from 1 January 2011 for all listed entities and permitted for private sector entities including not-for-profit organizations Country China Status for listed companies as of April 2010 Substantially converged national standards European All member states of the EU are required to use IFRSs as adopted by the EU for listed Union companies since 2005 France Germany India Indonesia Italy Japan Mexico Required...
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...|Q1a) |Advantages / Disadvantages of Sole Trader, Partnership, Limited Company | | | | |Ans.: | | |Advantages Partnership or sole proprietorship |Disadvantages of Limited Company | |A company has to be formed and registered pursuant to the |A company has to be formed and registered pursuant to the | |provisions of the Companies Ordinance (Cap32), whereas a |provisions of the Companies Ordinance (Cap 32), more | |partnership is just and agreement between the partners, which |restrictions should be followed. | |may be oral or even inferred from conduct. | | |A sole proprietor can carry out business without having to | | |comply with any formality. | | |The administration and management of a company is governed by |The administration and management of a company is governed by | |the Companies Ordinance, which does not apply to a partnership...
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...International Business Research Vol. 2, No. 2 Harmonization of Accounting Standards through Internationalization Nikhil Chandra Shil, ACMA (Corresponding Author) Department of Business Administration East West University 43, Mohakhali C/A, Dhaka – 1212, Bangladesh Tel: 9887989(Off.) ext 253, 01819289589 (M) E-mail: nikhilacc@yahoo.com Dr. Bhagaban Das P.G. Department of Business Management, Fakir Mohan University P. O.: Balasore, Pin.: 756019, Orissa, India E-mail: bhagaban_fm@yahoo.com Alok Kumar Pramanik Department of Commerce, Bhatter College P. O.: Dantan, Pin. : 721426, Paschim Medinipur, West Bengal, India E-mail: alokdantan@sify.com Abstract The journey to have a common set of accounting standards started long before to give it a professional shape and essence. And accountants all over the world feel the necessity to shorten the gap among different streams of accounting practices through harmonization. Still, we have a couple of strong variants of accounting practices (say, for example, US GAAP, UK GAAP, IAS etc.) over the world existed and practiced simultaneously. These variants are working as threats towards harmonization of accounting practices. However, the profession has also witnessed some improvements in recent years in the process of global convergence putting some ray of hope. International and even local standard setting bodies have come up with projects of harmonization and in most of the cases became successful. The day is not far away when we will observe...
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...Chapter 1 The Fundamentals of Accounting MULTIPLE CHOICE QUESTIONS B2C01T1Q001eng In financial accounting, the information reported is expected to have which of the following attributes? | |Presented in |Financial statements are | | |a standard format |prepared on a regular basis | |A. |No |Yes | |B. |Yes |Yes | |C. |No |No | |D. |Yes |No | Answer: B B2C01T1Q002eng Financial statements A. are a process of recording daily transactions. B. are one of the two major branches in accounting. C. report past results. D. do not involve personal judgements. Answer: C B2C01T1Q003eng Which of the following is/are not (a) financial statement(s)? i) Bookkeeping ii) An income statement iii) A tax return iv) A balance sheet A. (i) B. (i) and (iii) C. (i) and (iv) D. (ii) and (iii) Answer: B B2C01T1Q004eng A person who studies the financial statements of a business and decides whether the business should continue to operate is A. the owner of the business. B. a potential investor. C. the auditor of the business. D. a teacher or student. Answer: A ...
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...The current issue and full text archive of this journal is available at www.emeraldinsight.com/0268-6902.htm An empirical comparison of non-Big 4 and Big 4 auditors’ perceptions of auditor independence Non-Big 4 and Big 4 auditors’ perceptions 917 Philip Law Department of Accounting, Faculty of Business Administration, University of Macau, Taipa, Macau Abstract Purpose – Perceived independence is one of the corner-stones in auditing theory. Despite prior research on auditor independence, the results are inconclusive. The lack of research in the Hong Kong ´ˆ auditing environment motivates this study, particularly following the Enron debacle. The purpose of this paper is to examine the non-audit services (NASs), competition, rank and types of auditors, in respect of the independence problem as it relates to the practices of Hong Kong auditors in the post-Enron environment. Design/methodology/approach – Four independent variables identified from literature gaps are examined, namely NASs, levels of competition, auditors of different ranks and types of auditors. Mixed ANOVA are employed to analyze survey responses from 207 “Big 4” and 185 “non-Big 4” auditors. Findings – Results of the study show that the provisions of NASs and high competition could have a negative influence on auditors’ perceptions of independence. Second, auditors’ perceptions that the influence of NASs on independence depends on an individual auditor’s rank are supported. Senior managers...
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...Governance Report 03 Results Highlights for 2013 10 Management Discussion and Analysis Contents 04 Financial Summary Directors and Senior Management Independent Auditor’s Report 59 64 Consolidated Statement of Profit or Loss Consolidated Statement of Financial Position Statement of Financial Position 66 Consolidated Cash Flow Statement Notes to the Financial Statements 70 62 Consolidated Statement of Profit or Loss and Other Comprehensive Income 65 68 72 69 Consolidated Statement of Changes in Equity 361 DEGREES INTERNATIONAL LIMITED Company Information BOARD OF DIRECTORS Executive Directors Ding Wuhao Ding Huihuang Ding Huirong Wang Jiabi COMPANY SECRETARY Choi Mun Duen HKICPA FCCA, CAYMAN ISLANDS SHARE REGISTRAR AND TRANSFER OFFICE Royal Bank of Canada Trust Company (Cayman) Limited 4th Floor, Royal Bank House 24 Shedden Road, George Town Grand Cayman KY1-1110 Cayman Islands (Chairman) AUTHORISED REPRESENTATIVES Ding Wuhao Choi Mun Duen Independent Non-executive Directors Yan Man Sing Frankie Sun Xianhong Liu Jianxing (Resigned and effective from 2 September 2013) Tsui Yung Kwok REGISTERED OFFICE Cricket Square, Hutchins Drive PO Box 2681 Grand Cayman, KY1-1111 Cayman Islands HONG KONG SHARE REGISTRAR Computershare Hong Kong Investor Services Limited Shops 1712–1716, 17th Floor Hopewell Centre 183 Queen’s Road East Wanchai, Hong Kong BOARD COMMITTEES Audit Committee Yan Man Sing...
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...HKAS 21 Revised July 2012May 2014 Hong Kong Accounting Standard 21 The Effects of Changes in Foreign Exchange Rates HKAS 21 COPYRIGHT © Copyright 2014 Hong Kong Institute of Certified Public Accountants This Hong Kong Financial Reporting Standard contains IFRS Foundation copyright material. Reproduction within Hong Kong in unaltered form (retaining this notice) is permitted for personal and non-commercial use subject to the inclusion of an acknowledgment of the source. Requests and inquiries concerning reproduction and rights for commercial purposes within Hong Kong should be addressed to the Director, Finance and Operation, Hong Kong Institute of Certified Public Accountants, 37/F., Wu Chung House, 213 Queen's Road East, Wanchai, Hong Kong. All rights in this material outside of Hong Kong are reserved by IFRS Foundation. Reproduction of Hong Kong Financial Reporting Standards outside of Hong Kong in unaltered form (retaining this notice) is permitted for personal and non-commercial use only. Further information and requests for authorisation to reproduce for commercial purposes outside Hong Kong should be addressed to the IFRS Foundation at www.ifrs.org. Further details of the copyright notice form IFRS Foundation is available at http://app1.hkicpa.org.hk/ebook/copyright-notice.pdf © Copyright 2 HKAS 21 (July 2012May 2014) CONTENTS from paragraph INTRODUCTION IN1 HONG KONG ACCOUNTING STANDARD 21 THE EFFECTS OF CHANGES IN FOREIGN...
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...THE HONG KONG POLYTECHNIC UNIVERSITY AF5206 HONG KONG TAX FRAMEWORK Unit 14 – Anti-avoidance Provisions Coverage 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Tax avoidance and Tax evasion Principles of anti-avoidance rules Anti-avoidance provisions in IRO Section 61 Section 61A Doctrine of fiscal nullity Section 20 Section 61B Section 39E Section 9A (Type I service company arrangement) Type II service company arrangement Advance Ruling Tax planning and ethical issues Basic tax planning principles Basic techniques of tax planning 1 TAX AVOIDANCE AND TAX EVASION Tax avoidance - Attempt to obtain tax benefit (i.e. reduction, elimination or postponement of tax) by legal means Tax evasion - Failure on the part of taxpayer to supply full and correct information relevant to an assessment of tax because of deliberate attempt or negligence - An offence punishable by a fine and/or imprisonment 2 PRINCIPLES OF ANTI-AVOIDANCE RULES Westminster principle - “Every man is entitled if he can, to order his affairs so that tax attaching under the appropriate Act is less than it would otherwise be.” [Lord Tomlin in IRC v. Duke of Westminster (1935)] Choice principle - Established in Australian case law 2014 MPA_U14 Anti-avoidance.doc 1 August 2014 - Taxpayers are free to create favourable situations which will attract tax consequences for which the legislation specifically provides - If the legislature confers a choice on the taxpayer so as to whether or not...
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...The Hongkong and Shanghai Banking Corporation Limited Annual Report and Accounts 2012 THE HONGKONG AND SHANGHAI BANKING CORPORATION LIMITED Annual Report and Accounts 2012 Contents Financial Highlights ........................................................................................................................................... Report of the Directors ...................................................................................................................................... Financial Review ............................................................................................................................................... Statement of Directors’ Responsibilities ............................................................................................................ Auditor’s Report ................................................................................................................................................ Financial Statements .......................................................................................................................................... Consolidated income statement ......................................................................................................................... Consolidated statement of comprehensive income ............................................................................................ Consolidated balance sheet .......................................
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...HKAS 33 Issued March 2004Revised March 2010 Hong Kong Accounting Standard 33 Earnings per Share HKAS 33 COPYRIGHT © Copyright 2012 Hong Kong Institute of Certified Public Accountants This Hong Kong Financial Reporting Standard contains IFRS Foundation copyright material. Reproduction within Hong Kong in unaltered form (retaining this notice) is permitted for personal and non-commercial use subject to the inclusion of an acknowledgment of the source. Requests and inquiries concerning reproduction and rights for commercial purposes within Hong Kong should be addressed to the Director, Finance and Operation, Hong Kong Institute of Certified Public Accountants, 37/F., Wu Chung House, 213 Queen's Road East, Wanchai, Hong Kong. All rights in this material outside of Hong Kong are reserved by IFRS Foundation. Reproduction of Hong Kong Financial Reporting Standards outside of Hong Kong in unaltered form (retaining this notice) is permitted for personal and non-commercial use only. Further information and requests for authorisation to reproduce for commercial purposes outside Hong Kong should be addressed to the IFRS Foundation at www.ifrs.org. Further details of the copyright notice form ifrs foundation is available at http://app1.hkicpa.org.hk/ebook/copyright-notice.pdf © Copyright 2 HKAS 33 (March 2004March 2010) CONTENTS paragraphs INTRODUCTION IN1-IN3 HONG KONG ACCOUNTING STANDARD 33 EARNINGS PER SHARE OBJECTIVE SCOPE DEFINITIONS MEASUREMENT Basic Earnings...
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