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INDUSTRY INSIGHTS 業 界 透 視 February 2018 • INDUSTRY INSIGHTS 業 界 透 視 ACCOUNTANTS Disciplinary Proceedings and "Token" Sanctions As previously noted in Industry Insights (June 2017, "Auditors' Professional Standard Headed for Final Appeal"), in Registrar of HKICPA v Wong & Anor, FACV 10/2017, 22 December 2017, the substance of a complaint against the appellant accountants was that they failed to apply a professional standard in connection with an audited company's compliance with Hong Kong Accounting Standard 39 ('HKAS 39' – "Financial Instruments: Recognition and Measurement") in respect of an available- for-sale financial asset. Leaving aside the costs, given the small fine and non-public nature of the sanction (in this case) it would have been understandable if the accountants had decided not to challenge the outcome of the disciplinary proceedings. However, the matter made its way to the Court of Appeal and Court of Final Appeal ('CFA'). The CFA held (at paragraph 41 of its unanimous judgment) that on a true construction of HKAS 39 an impairment adjustment must be made in respect of an available-for-sale financial asset consisting of an equity instrument once there had been a significant or prolonged decline in its fair value. Attention then turned to the arguably more interesting issue. Namely, did a complaint that a certified public accountant "failed or neglected to observe, maintain or otherwise apply a professional standard", incorporate a standard of reasonableness capable of excusing an auditor notwithstanding a default? This question was answered in the negative. The complaint did not import a standard of reasonableness capable of exonerating the accountants. The CFA concluded that the relevant disciplinary committee had been entitled to find the complaint established. Not to be lost in all of this is that the complaint was at the least serious end of the spectrum, with the aim of (for example) enforcing the application of a published standard in the interests of professional practice rather than punishment. It appears to have been accepted by the relevant disciplinary committee that it was justified in taking a "very lenient" approach that merited a token sanction. Interestingly, the HKICPA has recently published on its website a " Guideline to Disciplinary Committee for Determining Disciplinary Orders", setting out the approach to be adopted in deciding on appropriate sanctions. Going forward, it will be interesting to see the extent to which the Financial Reporting Council (once it takes over responsibility for regulation of listed company auditors after the government's reforms are introduced) will move towards more guidance, remedial measures and (where appropriate) education and training for less serious regulatory matters involving the application of highly technical professional standards. - David Smyth and David Kwok, RPC 會計師 紀律研訊程序及「象徵式」懲 罰 誠如先前在《業界透視》(2017年6月, 「會計師:年底就關乎核數師專業標準的 判決進行終極上訴」)提到,在Registrar of HKICPA v Wong & Anor案(FACV 10/2017,2017年12月22日),上訴人( 會計師)被投訴,投訴的實質內容是,他們 評估被審計公司在可供出售金融資產方面 是否已遵守香港會計準則第39號(「 HKAS 39」――「金融工具:確認及計量」)的 時候,沒有應用專業標準。 撇開訟費不談,基於上訴人只被判小額 罰款,而且(這宗案)懲罰屬不公開性質, 即便會計師決定不挑戰紀律研訊程序的結 果,也是可以理解的。然而,事件已上訴 至上訴法庭,再由上訴法庭上訴至終審法 院。 終審法院裁定(法院的一致判決載於第41 段),按照對HKAS 39的真確詮釋,包含 股票工具的可供出售金融資產的公允值一 旦大幅下跌或長時間下跌,必須作出減值 調整。 可以說,關注點已經轉到更有趣的問題 上。那就是,指某會計師「沒有或忽略遵 守、維持或以其他方式應用專業標準」的 投訴是否包含合理性的準則,因而核數師 雖然失責,也能靠這準則得以開脫免罪。 問題的答案是「不」。投訴沒有引入可免 除會計師責任的合理性準則。 終審法院斷定,相關的紀律委員會一直有 權裁定投訴成立。 www.hk-lawyer.org 59

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