Members Forum QP Concept and Philosophy Transitional Arrangements

Members’ Forum § QP Concept and Philosophy § Transitional Arrangements § Accreditation Process 1

Purpose § We need to understand appreciate what our education standards § Why we need to establish our own qualifying benchmarks in Hong Kong 2

QP Concept and Philosophy Objectives of New Professional Accreditation Framework: § To ensure that professional accountants will have the required competency to meet future challenges § To establish our own benchmarks for competency standards for professional accountants in Hong Kong § To achieve international recognition § Benchmarking to best international practices on accreditation, education and training 3

Content, Standards & Quality The 1997 blueprint outlined a new Professional Accreditation System covering the following aspects of qualifying process: § Pre-entry education • Graduate entry (international norm) • Accreditation of academic qualifications § Qualification Programme • Competency-based standards § Practical experience • A structured Authorised Employer/Supervisor scheme 4

CPA Designation Degree (Graduate Entry) Qualification Programme Authorised Employer/ Supervisor Scheme Accredited Degrees or equivalent Competency Based Standards 3 -5 Years Supervised Work Experience 5

QP Training Philosophy § Develop skills in application of knowledge – problem identifications and solving § Develop professional judgment § Develop generic skills within business context (eg communication, interpersonal and leadership skills) § Integrate knowledge across fields 6

QP Trains Candidates to § Research § Apply knowledge to solve practical problems § Integrate knowledge across technical areas § Work with others to achieve common goals § Communicate effectively § Be exposed to simulated practical situations 7

HKICPA Qualification Programme Module A Module B Module C Module D Financial Reporting Financial Management Auditing & Information Management Taxation 4 3 -hour Module Workshops (study materials provided) over 15 weeks 3 -hour Open-Book Exam Final Professional Examination 6 -hour Open-Book Exam 8

Benefits of QP § Shortest route to qualify as CPA (Practising), with full exemptions from Hong Kong PC Examinations § 2 -Paper exemptions with CICPA § Internationally recognised - Get designations of CPA / CA / ACCA - In Australia, New Zealand, UK and others. 9

HKICPA / CPA Membership Admission QUALIFICATION PROGRAMME Members of recognized accountancy bodies HKICPA Aptitude Tests* + practical experience in accounting (3 -5 years) CPA (HKICPA Member) PC Exams * ACCA, CPAA & ICAEW exempted + relevant auditing experience CPA (Practising) 10

Benefits of QP • Next targeting recognition in Canada • Government recognition: Continuing Education Fund – Only need $5, 000 to get a professional qualification 11

Recognised Overseas Accountancy Bodies ICAA (Australia) ICANZ (New Zealand) CPA Australia ACCA SAICA (South Africa) ICAS (Scotland) ICAEW (England & Wales) ICAI (Ireland) ICAZ (Zimbabwe) AIA CIMA CIPFA AICPA (USA) CICA (Canada) 12

Review of Existing Recognition Arrangements • Notice to discontinue existing recognition arrangements with effect from 1 July 2005 given to: – MRA: ACCA, CPA Australia – Unilateral recognition: AIA, AICPA, CICA, CIMA and CIPFA 13

Review of Existing Recognition Arrangements • Purpose : To bring uniformity and consistency to the future standard of our membership admission • Delegated authority to qualify members • Introduction of evaluation process – To assess overseas qualifications for mutual recognition purpose 14

Transitional Arrangements Prof. Exam + Experience + Aptitude Test = Membership • CPA Australia – Pass all exams before 31 Dec 2005 – For applications received on or after 1 July 2005: • Experience after 1 Jul 2005 under AE/AS • Aptitude Test applies after 1 Jul 2005 • AIA, AICPA, CICA, CIMA, CIPFA – HKICPA will honour membership applications before 1 July 2005 15

Transitional Arrangements • ACCA – Relevant degree holders - Pass all exams before 1 July 2005 – Non-relevant degree holders – Pass all exams before 1 July 2006 – For applications received on or after 1 July 2005: • Experience after 1 Jul 2005 under AE/AS • Aptitude Test applies after 1 Jul 2005 – Bridging Programmes for conversion to QP framework (under approval by Council) 16

Accreditation Process for Recognition • Document entitled “Information for Professional Bodies seeking Recognition” published on HKICPA website www. hkicpa. org. hk • Outline review process – To assess overseas qualifications for mutual recognition purpose • Process, procedure and criteria: Open, clear and transparent 17

Review Process • Indepth assessment of: – Tertiary education – The professional programme – Practical experience • Also cover to a lesser extent assessment of: – The profession and general environment – Requirements for maintenance of membership e. g. continuing professional development 18

Review Process – 3 step approach • Step 1: – Professional body to complete Questionnaire (Appendix 1) – Desk Review: To establish if there is substantial gap and whether to proceed to Step 2 – Agree reviewer (independent consultant) 19

Review Process – 3 step approach • Step 2: – Submit detailed information (Appendix 2) – Reviewer to conduct a desk review of information submitted 20

Review Process – 3 step approach • Step 3: – Only when Steps 1 and 2 desk review completed to the satisfaction of HKICPA for full recognition status – Site Visit by Reviewer to Professional Body’s home country to assess (Appendix 3): • Quality of personnel involved • Quality of implementation of procedures documented, etc • Covering the areas under reviews 21

Outcome of Review Process • Detailed Review Report – Based on HKICPA requirements ie QP framework as the benchmarks – HKICPA will use Report and other information to determine the level of recognition to be given – HKICPA Committees and Council to deliberate on recommendation – Discussion with Professional Body – HKICPA will formally advise the Professional Body of its decision 22

Accreditation Process • Consistency and uniformity of standards are our aims • This is our responsibility as the statutory body for the profession in Hong Kong 23

Thank-you very much! 24