Final Examination December 2010 Session List of Special Topics

The following topics have been designated as special topics. This means that at least 70% of the Final Examination will be based on the topics below. These topics will be integrated so that candidates are exposed to practical issues faced by professional accountants in practice.

1. Professional Ethics Regulatory framework of professionalism and the fundamental principles of HKICPAs Code of Ethics for Professional Accountants Code of Ethics for Professional Accountants in public practice

2. Financial Accounting and External Reporting Legal requirements associated with company structure, share offerings, debt obligations and restructuring Revenue Leases Provisions, contingent liabilities and contingent assets Impairment of assets Share-based payment Related party Events after the reporting period Presentation of financial statements Consolidated financial statements

3. Management Accounting Performance indicators and measures for organisational units Project appraisal techniques and processes Strategy formation processes, including data gathering structures and SWOT analysis Cost measurement and analysis in services and manufacturing environments

4. Financial Management Analysis of business strategy and plans in financial terms Assessment of business risk and establishment of an organisational risk strategy Valuation of business entities and the shareholders equity in companies Instruments for controlling risk Considerations for companies in insolvency and liquidation

5. Audit of Financial Statements Understanding the entity and its environment Assessing the risks of material misstatement The auditors procedures in response to assessed risks Implement information systems and communications within technological and cost constraints 1

Considering the work of internal auditing Assurance engagements

6. Tax liabilities for individuals, unincorporated businesses, partnerships and companies Identify the basic criteria for ascertaining chargeability to profits tax and describe what constitutes deemed trading receipts Describe the rules governing the source of profits for profits tax purposes (including the chargeability of e-commerce transactions) Identify assessable and non-assessable profits from a trade, profession and business (including taxability of financial instruments) Identify the tax issues (profits tax and stamp duty) in different types of operation and business transaction such as acquisition of shares or assets of a business Identify allowable and non-allowable deductions under profits tax, including interest deductions Identify the tax issues relating to trading, manufacturing, services and investment holding businesses Describe the rules governing the source of income from an office, employment and pension Evaluate transfer pricing issues and the relevant DIPN issued to date Identify the tax rules governing employee share option benefit and share award Compute depreciation allowances on plant, machinery and buildings or structures

7. Hong Kong tax system, including tax planning, in relation to individuals and other entities Identify issues on tax planning opportunities for individuals, partnerships, unincorporated businesses and corporations and group restructuring Evaluate alternative business operations and transactions from a tax perspective Describe tax planning opportunities for individuals under the double taxation arrangement between Mainland China and the HKSAR

Hong Kong Institute of CPAs 15 October 2010