Presented by Albert Au Hong Kong Institute of
Presented by : Albert Au, Hong Kong Institute of CPAs Venue: IFAC SMP Forum, Beijing Date: 28 October 2009 SMPs Adapting to the Economic Turbulence and Laying Foundations for Sustainable Growth
Summary § Impact of the economic crisis Ø On the Hong Kong economy Ø On SMPs in Hong Kong § SMPs: adapting to the economic crisis and laying the foundations for sustainable growth § HKICPA’s response to the economic crisis 2
Impact of the Economic Crisis on the Hong Kong economy § § Started about 3 months’ later than in the USA/Europe Less impact in Hong Kong, but still very significant Benefit of the economic stimulus measures of the mainland Some positive signs of recovery: Ø Rising residential property market and prices Ø Hang Seng index positive: - 30 September 2009: 20, 955 - 27 October 2008: 11, 016 - 30 September 2008: 18, 016 3
Impact of the Economic Crisis on the Hong Kong economy § But the real economy is not recovering § Exports fell 13. 9% from August 2008 to August 2009 § Seasonally adjusted unemployment rate in Hong Kong § June – August 2008 3. 2% § June – August 2009 5. 4% § The worst has not yet been seen 4
Impact of the Economic Crisis on Hong Kong SMPs A delayed impact on SMPs which will last for another year at least § § Reduction in clients’ business activity Pressure on fees Decreased staff turnover General uncertainty 5
SMPs Adapting to the Economic Turbulence How should SMPs adapt? § By getting closer to clients Ø Deliver greater value to clients Ø Raised awareness of professional issues Ø Sound practice management § Essential to maintain professional integrity § Sound practice management 6
SMPs Adapting to the Economic Turbulence Deliver greater value to clients § Develop and offer Ø new, value added services Ø specialist services § Better service delivery 7
SMPs Adapting to the Economic Turbulence Raised awareness of professional issues § Know your clients and your clients’ businesses better § Responding to the heightened risk of fraud in clients’ businesses § Appropriate assessment of clients’ businesses as going concerns § Maintaining professional standards in the face of downward fee pressure 8
SMPs Adapting to the Economic Turbulence Sound practice management § § § A well defined business strategy Controlling costs Ensuring sufficient liquidity Improving efficiency Speed of work, billing, payment by clients Actively managing the risks 9
Laying the Foundations for Sustainable Growth Sustainable SMP growth § Adapting to the challenges will also lay the foundations for sustainable growth § Leadership in charting the way forward 10
HKICPA’s response to the economic crisis Primary focus: providing professional technical support § Events and correspondence focusing on key topics of heightened relevance in the crisis Ø Challenges in auditing fair value estimates Ø The auditor’s responsibilities to consider fraud Ø Going concern / liquidity risk considerations Ø Accountants’ reports on solicitors’ accounts § E-correspondence to all members explaining the reasons and rationale for the amendments to IAS 39 and HKFRS 7. 11
HKICPA’s response to the economic crisis Primary focus: providing professional technical support § Financial reporting and auditing alerts § SMP/SME resource centre on HKICPA website § Promotion of new areas of work for members (eg HKID Capital Investment Entrant Scheme) § Investment initiatives to enhance technical training and support 12
Thank you Albert Au Member, IFAC SMP Committee 13
- Slides: 13