Dear members,

The further regulatory reform came into effect on 1 October 2022, representing a significant shift in the Institute’s role. While the Institute continues its crucial roles as registration authority of CPAs and the accounting and auditing standard setter, as well as to administer the training and development of the accounting profession in Hong Kong through the Qualification Programme (QP) and continuing professional development (CPD) training, the powers in issuance of practising certificates, registration and inspection of practice units, and regulating the conduct of CPAs and practice units were transferred to the Accounting and Financial Reporting Council (AFRC).

It is fitting that the first year of this transition would also fall on an important milestone year for the Institute – our 50th anniversary. This momentous milestone is a great opportunity for the Institute to iterate its vision and mission afresh and we are proud of the robust set of events we have created this year on the occasion of our golden jubilee.

While most of the celebrations fall after the reporting financial year, these occasions were the culmination of extensive planning and hard work by the 50th Anniversary Organizing Committee and staff throughout the year.

I invite our readers to explore the dedicated 50th anniversary website and engage with the exciting content it offers, including an overview of our Institute’s history, celebrations, and highlights from each event.

Strategic achievements

While honouring our past, we are also focused on building a bright future for the accounting profession. Our strategic initiatives have paved the way for remarkable achievements and progress. The following are some achievements worth highlighting.

In anticipation of the inaugural International Sustainability Standards Board standards, the Institute’s Financial Reporting Standards Committee and Sustainability Committee established a dedicated task force and scaled up its outreach activities in the previous financial year. This culminated in the comment on the exposure drafts submitted in July 2022 for IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information and IFRS S2 Climaterelated Disclosures, which were finally issued in June 2023. Our dedicated teams have worked tirelessly to develop new programmes and initiatives that equip our members with the necessary skills and knowledge to thrive in a decarbonized economy. These efforts include the introduction of new CPD offerings, deep-dive workshops, and a wealth of online resources. We are committed to ensuring that our members are well-prepared to embrace the challenges and opportunities of a rapidly changing business landscape.

Demonstrating our commitment to facilitate our members’ professional development, we organized 154 online CPD events, 48 face-to-face events, and made available 732 e-learning programmes. In total, the programmes received over 104,036 enrolments. In order to provide cost-effective options, we also held 43 free webinars and online courses which attracted over 45,000 enrolments. We also launched the Membership Renewal Reward Scheme to recognize the commitment and dedication of members to the Institute and provide benefits to members who met the pre-requisite criteria by awarding two complimentary CPD hours’ worth of courses. Over 7,300 members benefitted from the scheme.

Talent engagement is crucial for sustaining the vitality of our profession and adapting to the evolving needs and priorities of the next generation is essential for our continued growth and relevance. Throughout the year, we continued to visit different universities, tertiary institutions, and secondary schools to promote the value proposition of a career in accounting and the QP. In line with this, we successfully launched the Revised Practical Experience Framework under the QP at the end of 2022. This framework aligns with international standards and best practices of leading accounting bodies, incorporating digital processes that exemplify the future of our Institute and the profession.

To improve the overall experience for readers of our flagship magazine A Plus, the Institute brought enhancements to the publication in two phases. As part of the Institute’s sustainability plan and commitment to achieving net zero carbon emissions, A Plus halted the production of physical copies, shifting fully online beginning with the September 2022 issue. In January 2023, the magazine moved towards a quarterly publication schedule, accompanied by a brand new website with an enhanced user interface and new functionality to facilitate the reading experience.

I encourage you to read the full 2023 Annual Report for a comprehensive collection of our achievements. Your support and engagement have and continue to be instrumental in driving our success.

Finances

In terms of finances, the Institute has made significant progress in overcoming the financial deficit it faced in recent years, albeit with a few caveats. Through diligent efforts to circumvent structural hurdles, the Institute recorded a positive turnaround in the reported fiscal year with a surplus of HK$54 million in 2023. This improvement stems from non-recurrent items, cost saving measures and re-engineering initiatives to improve the financial viability of business operations.

Despite this ostensible turnaround, there remain looming long term challenges ahead. While the transfer of the Institute’s former regulatory functions to the AFRC has led to a reduction in headcount and associated staff costs, the Institute will no longer receive fees from practice units and practitioners holding practising certificates. Disciplinary fines and legal cost recovery will also no longer be a source of income as soon as the remaining disciplinary cases reach completion in the coming months.

Although the membership fee adjustment in 2023 temporary alleviated the effects of revenue loss from the transfer of regulatory functions, the Institute’s finances are still expected to be impacted, which is further compounded by a decline in QP student population.

To ensure the continuity of the Institute’s operations and activities, several measures have been identified, including membership fee adjustments and performance enhancements in key segments of the QP and CPD offerings. As previously decided by the Council, the Institute has scaled-down its office space to optimize property utilization, with the intention of generating additional income from the office space released. These measures aim to bolster the Institute’s financial sustainability, allowing us to establish a robust foundation to better serve our members and the profession.

Optimism for the future

As we reflect on the remarkable achievements of the past year and celebrate the 50th anniversary of our Institute, we are filled with optimism for the future. The challenges and opportunities that lie ahead will require our unwavering commitment, collaboration, and adaptability. With our dedicated members, visionary leadership, and a strong foundation built over five decades, we are well-positioned to navigate the evolving landscape of the accounting profession and continue to make a positive impact on our profession, society, and the business world at large.

I would like to take this opportunity to extend my deepest gratitude to the Council, Institute staff, and all members for their dedication and support. Together, we can begin building our own legacy to serve generations to come.

Let us embrace the future with passion and enthusiasm, knowing that our collective efforts will shape a brighter and more prosperous tomorrow. Thank you for your continued support, and I look forward to the exciting journey ahead.

Margaret W.S. Chan
Chief Executive and Registrar