Committee for the Registry of Auditors and Accountants 1 January 2014

Relocation of CRAC Office As of 20

th January 2014, the CRAC Office has

been relocated to a new address: 1/F Centro de

Recursos da Direcção dos Serviços de Finanças, No.

30 Rua da Sé, Macau. Should you wish to visit the

CRAC office for any type of application or enquiry,

please proceed to the above address.

Kindly note that the CRAC office can now be

contacted at (853) 8599 5343 or (853) 8599 5344 for

general enquiries, or (853) 8599 5300 for Accounting

Standards Hotline, while its fax number, email address

and website remain unchanged.

CRAC BULLETIN No. 36 – January 2014 (Not for sale)

Newest Provisions Regarding Temporary License for Macau Accounting Firms in Mainland China

On 27th

December 2013, the Ministry of Finance (MOF) issued a notice (MOF No.25 [2013]) regarding the policies of delegating the approval of overseas accounting firms’ temporary performance of auditing services in Mainland China. According to the notice, the carrying out of both the ‘Interim Provisions on Overseas Accounting Firms’ Temporary Performance of Auditing Services in Mainland China (No.4 [2011]) and ‘Notice on Suitably Simplifying the Documentation Requirements for Applications for Hong Kong and Macau Accounting Firms’ Temporary Performance of Auditing Services in Mainland China (MOF No.16 [2012]) shall continue, while the MOF made eight adjustments and supplementary provisions, all of which will come into effect starting 1

st January 2014. In this

issue of CRAC Bulletin, we shall take a look at the latest provisions regarding MOF No.25 [2013] and MOF No.16 [2012]. For full provisions of the said notices, please visit the MOF or Chinese Institute of Certified Public Accountants (CICPA) websites (www.mof.gov.cn; www.cicpa.org.cn).

Applications Made Simpler

Overseas accounting firms providing temporary services in two or more provinces, autonomous regions or municipalities directly under the Central Government may submit relevant applications to any of the corresponding financial departments at provincial level. According to the original provisions, applications had to be made to the financial department at national level. Hence, the new provisions have brought greater convenience to the applicants.

Two Documents Required for Application: Simplified Requests

Non-registered accounting practitioners from

accounting firms of Hong Kong and Macau who provide temporary services in mainland China are no longer

required to provide an ID copy but, instead, the accounting firm (Hong Kong or Macau) need to provide a list of all practitioners involved, with the list containing information such as the names and ID numbers of each practitioner.

Accounting firms of Hong Kong and Macau applying

for temporary licenses are no longer required to provide confirmation letter from corresponding organizations in Mainland China but, instead, the accounting firm (Hong Kong or Macau) need to provide a list of the corresponding organizations in Mainland China, with the list containing information such as the names and addresses of the corresponding organizations in Mainland China (written in Chinese), as well as the relationship between the overseas trustee and the corresponding organization in Mainland China.

Accounting firms of Hong Kong and Macau applying

temporary licenses are liable for the truthfulness for the content expressed in the two documents described above.

Providing Temporary Services: New and Specific

Confidentiality Provisions

Overseas accounting firms providing temporary services in Mainland China should abide by Chinese laws regarding confidentiality, and must not carry any accounting files from corresponding organizations in Mainland China out of the country, or provide any information and data legally acquired to parties other than the overseas trustee currently providing temporary service. For agreements or memorandums of cooperation signed between overseas regulatory organizations and MOF, any regulatory measures, safekeeping of audit working papers and other such items should be carried out under the stipulations specified in the agreements or memorandums signed. This confidentiality provision concerning treatment of accounting files is an additional provision to the original ones.

CEPA Related News

CRAC Members 2014

Chairperson: Iong Kong Leong Stephen

Effective Members: Yung Chi Chung; Luk Choi Yin; Kwok Sze Man; Lai Hang Sun Hans

Substitute Members: Kou Ka I; Bao King To; Leong Wun Chao; Leong Kit Fun

Committee for the Registry of Auditors and Accountants 2 January 2014

Statistics

As of 31st December 2013, the number of

registered auditors, registered accountants and audit firms registered with the Committee for the Registry of Auditors and Accountants is as follows:

Registered Auditors 113

Registered Accountants 172

Registered Audit Firms 13

Tax Treaty and Information Exchange As of end of 2013, the MSAR has reached Tax

Information Exchange Agreements (TIEA) or Double Taxation Agreements (DTA) meeting the latest international standards with 16 countries or regions respectively. On 29

th November 2013,

CRAC held a themed seminar and dinner gathering, inviting representatives from the Financial Services Bureau (DSF) to speak on this topic. Approximately 60 registered auditors or registered accountants attended the event. At the seminar, the speaker introduced the functions of international information exchange, as well as presented an overview of the international tax treaties, recent developments in Macau, and the corresponding provisions from Law No.20/2009 - ‘Information Exchange in Tax Matters’ (Troca de Informações em Matéria Fiscal). A Q&A session after the speech allowed the participants to make enquiries regarding the topic, which have been answered by the speaker respectively.

Functions of International Information

Exchange

International information exchange serves three functions: 1. Assures appropriate implementation of international and domestic tax rules; 2. Combats acts of tax evasion and avoidance; and 3. Promotes international cooperation in tax matters on both legal and actual practice aspects.

International Overview and Developments

in Macau Over 1,500 bilateral agreements have been

signed internationally since 2005, of which over 90% of these agreements have met international standards. Meanwhile, Macau has already signed bilateral agreements or treaties with 16 jurisdictions, and is currently in negotiations with another 15 jurisdictions. Among these agreements/treaties, Macau has reached DTA with 5 countries, which include Mainland China, Portugal, Mozambique, Belgium and Cape Verde; while 11 other countries have reached TIEA with Macao, which include 7 Northern European countries i.e. Denmark, Faroe Islands, Finland, Greenland, Iceland, Norway and Sweden, as well as Australia, India, Jamaica and Malta. Agreements/treaties that have already come into effect are available from the DSF website. (http://www.dsf.gov.mo/tax/tax_avoiddoubletax.aspx?FormType=0)

Law of ‘Information Exchange in Tax Matters’

Law No.20/2009 – ‘Information Exchange in

Tax Matters’ established applicable rules for engaging information exchange within the scope of tax treaties or agreements in tax matters signed between Macau and other tax jurisdictions, including the principles of information exchange, the corresponding competences, and information

exchange procedures among others. According to the regulations, the Chief

Executive has the competence to decide the formation of requests for information exchange in tax matters made by Macau, as well as accepting or rejecting requests for information exchange in tax matters presented to Macau; the DSF is the competent administrative authority for receiving, transmitting and implementing requests for information exchange in tax matters. Article 8 thereof has provided stipulations for which DSF staff and agents must keep professional secrecy in relation to knowledge of facts acquired during the exercise of their functions.

In the meantime, the law above has also

established a ‘five-day-period’ for corresponding organizations to provide information. Paragraphs 2 and 3 of Article 6 stipulate respectively that: after receiving the request, DSF notifies the corresponding institutions in order to have them submit information necessary for the carrying out information exchange, setting a period of minimum 5 working days (counting from the date of reception of the notification for presenting information); institutions who, justifiably, fail to submit the requested information within the time conferred by DSF, may request for an additional five working days for it. It should also be noted that, Paragraph 5 of Article 6 provides that: the non-performance of the request from the notification for presenting information constitute a crime of aggravated disobedience, as per accordance to Paragraph 2 of Article 312 of the Penal Code.

Editor’s note: In November 2013, an

announcement was made, during the annual meeting of the ‘OECD Global Forum of Transparency and Exchange of Information for Tax Purposes’, to approve phase 2 of MSAR’s assessment report, signaling that MSAR’s carrying out of information exchange in tax matters, whether in law or in practice, has met the standards recognized internationally, For more information, please visit the following website (http://www.oecd.org/tax/transparency/)

Themed Seminar and Dinner Gathering

Committee for the Registry of Auditors and Accountants 3 January 2014

Renewal of Professional Licenses In accordance with the corresponding

regulations, professional licenses for registered auditors and registered accountants must be renewed by 1

st February (inclusive) each year.

Applicants are required to submit, during office hours, the application form for renewal of license at least 30 days prior to the renewal date to the ‘Recepção de Expediente’, located on 1/F DSF Building, Integrated Services Centre (Taxation), or Taipa Service Centre. If necessary, please attach a declaration (authorizing a third party to collect the license), a recently taken passport photo, or a copy of the latest ID document.

Applicants are encouraged to submit their

applications at their earliest convenience. Please note that: CRAC would only accept applications for renewal submitted after the deadline referred to above (but before 31

st March) under special

circumstances and with sufficient justifications; nevertheless, applicants would be subject to an additional charge of up to thrice the renewal fees; in addition, CRAC would not accept any application for renewal submitted after 31

st March. Failing to

submit the application in due time will result in automatic suspension of the professional license. For more information and enquiries, please contact the CRAC office during office hours.

Licensing Exam 2013: Round 2 Completed

Round 2 of the 2013 licensing examinations for

first-time registration and re-instatement of ‘registered auditors’ and ‘registered accountants/accounting technicians’ has taken place at the Macau University of Science and Technology’s (MUST) School of Continuing Studies in Alameda Dr. Carlos D’Assumpção between 23

rd November and 7

th December 2013. A

total of 87 candidates have sit this round of exams (16 sat exams for registered auditors, 71 for registered accountants).

Starting 2008, the licensing exams are held twice annually. Under general circumstances, candidates are required to pass all subjects within an examination cycle (comprised of four

consecutive rounds held) in order to qualify for registration. Enrolment for round 1 of the exams usually take place between February and March each year, while actual exams are generally scheduled between May and June; whereas enrolment for round 2 of the exams usually take place between July and August each year, while actual exams generally scheduled between November and December. Please visit the CRAC website regularly for the latest update regarding examination news (Portuguese and Chinese versions only). Alternatively, please call the CRAC office during office hours for enquiries (8599 5343 or 8599 5344).

Circa 1,500 Students Attended CRAC Courses in 2013 Following Macau’s rapid economic

development in recent years, the importance of SMEs corporate governance has become ever more apparent, particularly when it comes to enhancing SMEs competitiveness. For this reason, CRAC has collaborated with the Association of Chartered Certified Accountants (ACCA) in hosting an ‘Internal Auditing Functions for SMEs’ seminar on 24

th October 2013. The seminar explored the

development of SMEs corporate governance

internationally and in neighbouring regions, starting from the characteristics of SMEs’ businesses, then moving on to interpreting the importance of internal auditing to SMEs and most common internal control issues; in addition, the seminar looked deep into how internal audit functions should be set up, including objectives, structure, staffing, and standards that could be referred to. Looking back at 2013 as a whole, CRAC has organized 10 training courses with foreign accounting institutes, (cont.p4)

Date Subject

Number of Candidates

Exams for Registered Auditors

Exams for Registered

Accountants

23rd

November 2013 General Accounting and Financial Accounting / General Accounting

3 45

24th November 2013 Macau Taxation Law 14 49

30th November 2013 Cost Accounting 6 37

1st December 2013 Commercial Code 12 37

7th December 2013 Auditing Standards 9 -

Exam News

Training News

Committee for the Registry of Auditors and Accountants 4 January 2014

(from p3) covering topics such as accounting, tax and internal auditing among others. Courses have been popular among accounting professionals, as nearly 1,500 people have attended these courses overall. Courses lasted from 2 to 5 hours, and are held either in small classes or larger seminar formats, depending on their nature and objective. Students who have completed the respective courses (reaching 80% attendance record) are awarded a certificate of attendance issued jointly by

CRAC and the corresponding foreign accounting institute.

Continuing development is an important

measure for strengthening and enhancing professional levels, and thus CRAC intends to host more training courses in the year ahead. CRAC welcomes any ideas or suggestions regarding training courses from the accounting industry.

New Opportunities for International Development and

Cooperation of the Accounting Industry A CRAC delegation attended the ‘Accountancy

Profession: Emerging Frontiers of Future Growth’ seminar jointly held by the Confederation of Asian and Pacific Accountants (CAPA) and Institute of Chartered Accountants of India (ICAI) in Kolkata, India between 21

st and 23

rd November 2013.

Meanwhile, CAPA also held an annual meeting during this period. The seminar took place at the Kolkata Science City Auditorium, built in the new developmental area of Kolkata, which has a seating capacity of over one thousand. High Attendance: Accountants Appear More

Important as Economy Develops Guests and participants at the seminar include

the President of India Mr. Shri Pranab Mukherjee, the Governor of West Bengal Mr. Shri M.K. Narayanan, the Chief Minister of West Bengal Ms. Mamata Banerjee, the Union Minister for Minority Affairs Mr. CA. K. Rahman Khan, and the Minister of Corporate Affairs Mr. Shri Sachin Pilot among others. In addition to representatives from accounting profession of different CAPA members, participants also include accounting professionals from various major Indian cities. Speeches made at the seminar largely involved in the topic of processes, issues and opportunities encountered during the development of the region’s accounting industry. Mr. Mukherjee pointed out that, like other industries in India, the accounting industry has benefited from the economic growth in recent years and, as a qualified accounting professional himself, he understands how professional accounting knowledge can provide different services to enterprises as well as changes to the country as a whole, and in these days of rapid economic changes, accountants bear greater responsibilities as they play more and more important roles.

India: In Response to Economic Difficulties

and Challenges of Accounting Standards

India has 18 official regional languages, 325 non-official languages, and 1,652 dialects. As for the Indian economy, the following figures had been recorded in 2012: GDP of 1.7425 billion (million millions) US dollars, GDP growth of 5%, per capita income of 1,266 US dollars, and the major industries’ contributions to GDP were: industry 15%, agriculture 22%, and service 63%.

The major difficulties faced by India

domestically are: responding to the challenge of achieving government’s financial balance, sustained high inflation, and the devaluation of the Rupee. In face of such issues, the Indian government tackled them in various ways: improve legislations and supervision, enhance the level of public governance and transparency, reduce barriers to trade and foreign direct investment, and bring down poverty and social inequalities among others.

As for the accounting profession, the transition of converging existing accounting standards with IFRS is a major challenge to the Indian accounting standards. It is said that more trainings will be provided for accountants and accounting practitioners, particularly in IT infrastructure and equipment as well as software, so as to coordinate with developmental needs. In India, there are a total of 192,513 accountants, comprising of 83,244 practicing accountants (43%), 8,243 non-full time accountants (4%), and 101,026 non-practicing accountants (53%). As for accounting firms, there are 36,651 independent firms (41%) and 52,359 firms with two or more partners (59%), giving a total of 89,010 firms.

CAPA: New Leadership Elected

In relation to CAPA, a number of items have been passed in this meeting, including the election of new leadership. Mr. Sujeewa Mudalige was elected as the new President of CAPA for the years 2014 and 2015. Mr. Mudalige, from Colombo, Sri Lanka, is a partner with PricewaterhouseCoopers in Colombo, Sri Lanka and a past President of CA Sri Lanka. He has been involved with CAPA since 2006. In his acceptance speech, Mr. Mudalige expressed gratitude to the Board and Members for their support and looks forward to leading CAPA to new heights.

Meanwhile, Ms. Jackie Poirier was elected as CAPA’s Deputy President. As past President of the Certified General Accountants Association of Canada – CGA, Ms. Poirier has also been involved with CAPA for six years.

The next CAPA Members and Board Meeting is scheduled to take place in Tokyo, Japan between 22

nd and 24

th May 2014.

CAPA Meeting

Committee for the Registry of Auditors and Accountants 5 January 2014

CJK Meeting 2013 The annual China-Japan-Korea Accounting

Standards Setters’ Meeting was held in Tokyo, Japan on 6

th November 2013. At the meeting, each

delegate provided an update on the developments in their respective jurisdictions, and had in-depth discussions about topical agendas of the International Accounting Standards Board’s (IASB). The meeting agenda included the Conceptual Framework, Leases, Financial Instruments, and Insurance Contracts. As usual, CRAC, together with the Hong Kong Institute of Certified Public Accountants (HKICPA), were invited to attend the meeting. Meanwhile, several IASB representatives attended the meeting upon invitation to provide a detailed presentation on IASB Outreach Event for insurance contracts as well as feedbacks received

from all circles. It is reported that IASB is currently reviewing the insurance contracts event, and plans to promulgate the new standard in 2015, which will come into effect approximately after 3 years.

Delegates at this meeting has reached several consensuses, such as having more frequent communication through meetings, such that the views between the parties would become closer or common; playing a leading role to promote enhanced cooperation among standards setters from the Asia-Oceania region, and to increase the prominence of the Asian-Oceanian Standard-Setters Group (AOSSG) in the global accounting standards setting community.

AOSSG 5th Annual Meeting

The AOSSG held its fifth annual meeting on 27th

and 28th November 2013 in Colombo, Sri Lanka.

The meeting was hosted by the Institute of Chartered Accountants of Sri Lanka (CA Sri Lanka) and attended by 17 members standard-setters including CRAC, as well as representatives of the IASB. Sri Lankan officials have made speeches at the seminar, while AOSSG members have reported on the IFRS Center of Excellence’s operations and progresses made by several countries in adopting the International Financial Reporting Standards (IFRS), as well as discussed a number of IASB key projects including conceptual framework and insurance contracts among others; meanwhile, IASB delegates presented the latest developments regarding several other key items, and praised AOSSG’s contributions to the IASB’s due process. By participating at these meetings, CRAC delegates were able to obtain a better understanding of the global trends of development of accounting standards, as well as to involve themselves in the standards-setting discussions.

Sri Lanka: Full Support to the Development

of a Single Global Set of Standards The President of CA Sri Lanka, Mr. Sujeewa

Rajapakse welcomed delegates to the meeting and, together with a delegation from the AOSSG and the CA Sri Lanka, lit the lamp to inaugurate the meeting. The Governor of the Central Bank of Sri Lanka, Mr. Ajith Nivard Cabraal, provided the keynote address. The Governor stressed the importance of high quality financial reporting in the development of a global market economy and that the government is fully supportive of the development of a single global set of financial reporting standards.

Chairman’s Expectation: Continue Developing a Stronger Voice Internationally

The AOSSG’s current Chairman is Mr. Clement

Chan from the HKICPA. Over the past two years, Mr. Kevin Stevenson and his team from the Australian Accounting Standards Board (AASB) have assumed the Group’s Chairman and Secretariat. Mr. Chan thanked Mr. Stevenson and the staff of the AASB for the outstanding work during their tenure in the capacity of AOSSG Chair and the Secretariat. Mr. Chan expressed his aspiration to continue to develop a stronger voice from the region internationally. In addition, members then ratified the appointment of Mr. Steve Lim, Chair of the Korea Accounting Standards Board (KASB), as the AOSSG Vice-Chair for a term of two years.

IFRS Center of Excellence: State of

Operations The IFRS Center of Excellence in Nepal has

completed two assignments: review of the standard-setting processes and capacity; and a report on the June 2013 IFRS ‘Train-the-Trainer’ (TTT) sessions in Kathmandu.

According to reports, further TTT sessions are

expected in 2014 and members thanked those jurisdictions that had provided presenters for the TTT sessions.

IASB Projects: Update and Discussion

Discussing IASB projects has always been an important agenda at AOSSG meetings and it was of no exception this time. Projects such as conceptual framework, insurance contracts, and financial instruments formed the focus of discussion.

(cont. p6)

International Meetings

Committee for the Registry of Auditors and Accountants 6 January 2014

(from p5)The meeting deliberated the IASB’s Discussion Paper ‘A Review of the Conceptual Framework for Financial Reporting’, including whether the Discussion Paper adequately addressed the identification of measurement bases; whether amounts presented in the Other Comprehensive Income should or should not be recycled and, should there be recycling, whether it should apply in all circumstances or not; how to make an appropriate distinction between liability and equity; whether the preliminary views about definitions of

assets and liabilities are appropriate; and whether preliminary views about the recognition threshold is appropriate.

In addition, IASB representatives also presented

the latest developments of various projects, including Revenue Recognition, Leases, Agriculture, and actual implementation of IFRS 3 – Business Combinations, among other research projects.

Macau Venue for CICPA Exam Held for 4th Straight Year

The Macao venue for the professional stage of the ‘People’s Republic of China Certified Public Accountants Uniform Examination’ (CICPA Examinations) 2013 has successfully taken place on 19

th and 20

th October 2013 (Saturday and Sunday).

Since 2010, the CICPA Examinations have established a venue in Macao in the fourth year running, fulfilling the agreements set out in <Supplement V to the ‘Mainland and Macao Closer Economic Partnership Agreement’>.

The CICPA Examination is a licensing examination of the national level. The exams are categorized into ‘professional stage’ and ‘integrated stage’. The 2013 professional stage exams took place simultaneously in all provinces, regions and districts, as well as in Hong Kong and Macau. There were a total of 570,000 candidates sitting the 2013 exams, with a combining total of 1.52 million exam papers taken from all subjects. The Macau Venue for the 2013 exams took place at the Macao

Productivity and Technology Transfer Center, located on the 7

th Floor of the Macao Chamber of

Commerce Building. The 2013 examination was held in e-format, as the six subjects were held over the course of a 2-day-period, which include: ‘auditing’, ‘financial management’, ‘economic laws’, ‘accounting’, ‘corporate strategy and risk management’, and ‘taxation laws’.

Both stages of the CICPA exams are held once annually. Please refer to the table below for more information regarding the 2014 exams. For more information regarding the CICPA examinations, look out for the <Regulation of Application for Sitting the People’s Republic of China Certified Public Accountants Uniform Examinations 2013 for HKSAR, MSAR and Taiwan Residents and Foreign Persons>, to be published soon at the CICPA exams website (www.cicpa.org.cn). Alternatively, please contact the CRAC office for enquiries. (tel: 8599 5350)

Committee for the Registry of Auditors and Accountants

Address : 1/F, Centro de Recursos da Direcção dos Serviços de Finanças

No. 30, Rua da Sé

Tel : (853) 8599 5343, 8599 5344

Fax : (853) 2838 9177

E-mail : crac@dsf.gov.mo

Website : http://www.dsf.gov.mo

Accounting Standards Hotline

(853) 8599 5300

CICPA Exam

Enrolment Date 31 March - 25 April 2014

Exam Date:

Integrated Stage 23 August 2014

Professional Stage 13/14 September 2014

Editorial Contributions are Welcome!