Welcome to the Hong Kong Institute of CPAs Members’ Forum

1. Members’ ForumHKICPA’s Education & Training Policy for Future Generations of Hong Kong CPAs & Recognition of Overseas Qualifications – Review & Transitional Arrangements6 October 2004

2. Welcome to the Hong Kong Institute of CPAsMembers’ Forum

3. Number • Members • in the audience 158 (ACCA [73] ) • Total HKICPA 22,560 (ACCA [14,000] )

4. 1982 – 2001Joint Examination Scheme (JES) • For 20 years, HKICPA had used the • ACCA examination as the qualifying • examination for Hong Kong.

5. ICAA(Australia)ICANZ(New Zealand)SAICA(South Africa) ICAS(Scotland)ICAEW(England & Wales)ICAI(Ireland)ICAZ(Zimbabwe) CPA Australia ACCA AIA CIMA CIPFA AICPA (USA) CICA (Canada) Recognition of Overseas Bodies as at 2004 • chart

6. June 2004: HKICPA announced intention to • re-evaluate its future recognition of • overseas qualifications • ACCA Mutual Recognition • CPAA • AIA • AICPA • CICA Unilateral Recognition • CIMA • CIPFA

7. The Future vs the Past • JES was something of the past. • Since the early 90’s, we decided to move on by clear policy. • Over the last 10 years, we have built ourselves our own standard and policy for training the next generation of accountants to serve Hong Kong and its changing business demand as an international financial centre and gateway to China.

8. Our Vision • Position the Hong Kong Institute of CPAs as Asia’s premier professional accounting body. • Protect Hong Kong’s future as a premier financial centre and the international gateway to China.

9. Our Mission • To produce the best accountants in the world. • Our Strategic Agenda • To promote our CPA Qualification Programme as the benchmark that will attract and nurture the next generation of talent into our profession in Hong Kong.

10. Requirement of our MRA Partners • Demonstrate to us, through a transparent due process of evaluation that their qualification and admission requirement meet the standards that the HKICPA has set for itself.

11. Evaluation Process forRecognition Arrangements • Purpose: To bring uniformity and consistency to the future standard of our membership admission. • [Equivalent standards] • Recognised overseas • qualification • • Accredited Degree • • QP (Competency Outcome) • • Authorised Practical Training  HK qualification

12. Due Process: Questions • Members may not have full appreciation • What are these current standards we have set for ourselves? • How were they established? • Whether we have gone through due process of consultation on these standards? • Are our recognition partners taken by surprise by what we are requiring them to do? • I shall explain.

13. Due Process ofConsultation & Preparation over 10 years • Diary of events • Pre 1982 Our Own Examination • 1982 Joint Examination Scheme (JES) commenced • 1993 Third Long Range Plan • May 1995 ) 3 phases of consultation on proposed new • May 1996 ) Professional Accreditation System (PAS) • Sep 1996 ) incl. transitional arrangements • June 1997 Blueprint on new PAS published • 1997 Served notice of termination of JES on ACCA

14. Due Process of Consultation & Preparation over 10 years • 1993 Long Range Plan – where do we want our profession to go? • “The quality of future entry into the profession can be improved by graduate entry.” • “The growing divergence between HK and UK practices has pointed to the necessity for the Society to provide its own professional examinations and determine its own policy to suit the changing business demands in Hong Kong.” • [Graduate entry is now the international norm.]

15. 1995 – 1997 Consultation • - members • - students • - educational institutions • - employer groups • - business • - government • - local and overseas professional & accounting bodies

16. Due Process of Consultation & Preparation over 10 years • 1998/1999 Implementation (Policy decisions, system set up, etc. Material development and initial training outsourced to ICAA/ICANZ/DTT consortium) • 1998 Notice to 14 bodies “we will re-examine • the basis for our recognition arrangements with them”. • 1999 Qualification Programme (QP) launched – our first home – grown qualification that meets the highest standard in the world. • 2000 Mutual recognition agreements with ACCA and CPA Australia signed.

17. Mutual Recognition AgreementsACCA and CPAA • Signed contract in May 2000 • Envisions significant changes to examinations and entry requirements • Envisions first review of MRA in June 2005 • Requires one year notice period • The Institute did this on June 25, 2004

18. Due Process of Consultation & Preparation over 10 years • 2001 JES terminated • Review of QP and other aspects of qualification process by ICAS • 2002 Refinement of existing framework to meet recognition requirements • Liaison with 7 Chartered Accountancy bodies to agree Reciprocal Membership Agreements (RMA) • 20 Nov 2002 RMAs signed in Hong Kong at the World Congress of Accountants

19. Due Process of Consultation & Preparation over 10 years • 2003 Aptitude Test required under RMA implemented – • Applicable to 12 bodies ACCA & CPAA contractually exempted (due to MRA) but • informed about upcoming review • 2004 Notification to 7 bodies about review of existing • arrangements Review and evaluation underway with CPA Australia AIA/AICPA/CICA/CIMA/CIPFA in dialogue to move forward • with the review • ACCA under discussion.

20. 2005 • Our Aim • Unify the standard of the HK CPA designation. • Complete the last step to fulfil the 1993 Long Range Plan’s vision.

21. Georgina Chan to cover:- • QP Concept & philosophy • Accreditation Process for recognition • Transitional Arrangements

22. HKICPA’s first and foremost concern • Students’ interests are reasonably protected. • - bridging programme • - open negotiation with ACCA on transitional period (to be considered based on data that ACCA had promised).