HK CPA Body Takes Disciplinary Action Against a CPA and a Corporate Practice

A Disciplinary Committee of the Hong Kong Institute of Certified Public Accountants has reprimanded Tang Wai Hung and W.H. Tang & Partners CPA Limited on 11 September 2014 for their failure or neglect to observe, maintain or otherwise apply a professional standard issued by the Institute.

The two have been ordered to pay a penalty of HK$50,000 (US$6,441.11) to the Institute. In addition, the respondents were ordered to pay costs of the disciplinary proceedings of HK$23,273.40 (US$2,998.14), which should be shared equally by them.

The corporate practice audited the financial statements of a listed company in Hong Kong for the year ended 31 December 2008 and expressed an unmodified auditor's opinion on the financial statements. Tang is one of the practising directors of the corporate practice and responsible for the audit engagement.

The Institute received information from the Financial Reporting Council about non-compliance with the requirements of an accounting standard in relation to the measurement of the revalued plant and machinery in the financial statements.

It was also noted that there had been no disclosure of a reconciliation of the carrying amount at the beginning and end of the period showing depreciation, and the carrying amount of the revalued plant and machinery under the cost model in the financial statements.

After considering the information available, the Institute lodged a complaint against the respondents under section 34(1)(a)(vi) of the Professional Accountants Ordinance.

The respondents admitted the complaint against them. The Disciplinary Committee found that the respondents failed or neglected to observe, maintain or otherwise apply section 130 "Professional Competence and Due Care" of the Code of Ethics for Professional Accountants for their failure to act diligently in accordance with the requirements of Hong Kong Accounting Standard 16 "Property, Plant and Equipment" in the audit of the financial statements.


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