Legislative Council

LC Paper No. CB(2) 780/98-99

Ref : CB2/SS/6/98

Paper for the House Committee meeting
on 4 December 1998

Report of the Subcommittee on the
Professional Accountants (Amendment) Bylaw 1998


1 This paper reports on the deliberations of the Subcommittee on the Professional Accountants (Amendment) Bylaw 1998 (Amendment Bylaw).

Object of the Amendment Bylaw

2. The object of the Amendment Bylaw is to raise the minimum pre-entry education requisite for registration as students of the Hong Kong Society of Accountants (HKSA) from the current General Certificate of Education 'Advanced' Level (GCE 'A' Level) to accountancy degree level with effect from 1 January 1999 and to prescribe new requirements for students who wish to enrol in the HKSA's new examinations.

Graduate entry policy

3. From 1999, HKSA will start to hold its own professional examinations. The new scheme will replace the Joint Examinations, which are currently provided by HKSA in association with the Association of Chartered Certified Accountants (ACCA) of the United Kingdom, after its contract with ACCA expires on 31 December 2001. The objectives of this new professional accreditation system are firstly, to ensure that professional accountants will have the required competency to meet future challenges and secondly, to enable HKSA to assume the full responsibility of ensuring its professional examinations are on a par with leading accountancy bodies in the world.

4. Under the HKSA's new professional accreditation system to be introduced in 1999, the education standard for entry into HKSA as a registered student will, with effect from 1 January 1999, be raised to accountancy degree level attained from an educational institute approved by HKSA. For persons who do not meet this new standard, HKSA will require them to first undertake either a Foundation Programme (for non-degree holders) or a Conversion Programme (for non-accountancy-degree holders) in which prospective students will be provided training at tertiary level. HKSA will secure adequate places for its prospective students for both the Foundation and Conversion Programmes from Hong Kong's tertiary institutions upon demand.

The Subcommittee

5. At the House Committee meeting on 13 November 1998, members agreed to form a Subcommittee to study the Amendment Bylaw.

6. Under the chairmanship of Hon CHAN Kam-lam, the Subcommittee held one meeting with representatives from the HKSA, the Hong Kong Polytechnic University (PolyU), the Hong Kong Association of Accounting Technicians (HKAAT) and the Hong Kong Accounting Professionals General Union (HKAPGU) on 24 November 1998. A membership list of the Subcommittee is at the Appendix.

Deliberations of the Subcommittee

7. In response to members' enquiries as to whether all parties affected have been fully consulted on the graduate entry policy and the new requirements for enrollment in the HKSA's new examinations, representatives from HKSA have explained that its registered students, members, member firms, government and regulatory bodies, local and overseas professional bodies, educational institutions and other interested parties have been consulted during the course of drawing up the proposals for a new professional accreditation system between 1995 and 1998. Consultation and publicity conducted during the same period included publishing the proposals in HKSA's publications, organising talks, forums and exhibitions, holding press conferences and interviews and attending radio talk shows. Throughout the entire consultation exercise, responses have been positive and the parties concerned have all indicated support for graduate entry and the main features of the new qualification framework.

8. The representative from PolyU has advised that the local tertiary institutions are in favour of the new scheme. They have been actively involved in the development of the new scheme, which will enable Hong Kong to compare favourably with the best professional practices in developed countries such as US and Canada in standards of accounting education and membership. Under the new scheme, there will be a clearer division of work between the tertiary institutions and HKSA in the provision of training for students in that the former will provide basic academic training, whereas the latter will provide professional training.

9. The representative from HKAAT has explained that their survey results on the new scheme reveal that none of their 7,000 odd students, about half of whom are graduates of the Technical Institutes or Technical Colleges, have expressed objection to the new scheme. Some of its students will proceed further to acquire HKSA membership after obtaining a HKAAT qualification. Under the new scheme, persons who have passed Levels I and II of the Accounting Technician Examinations will be required to attend a Foundation Programme before they can enrol as registered students of HKSA, whereas under the existing system they are exempted from 6 out of 14 papers of the HKSA/ACCA Joint Examinations. Given that accounting technicians at present have to study on their own or attend distance learning courses, their success rates are not very high and even if they do obtain the HKSA qualification, they usually take a long time to complete the examinations. For instance, the best students on average take 5 years to obtain the HKSA qualification, whereas the average ones will take up to 8 years. However, since the Foundation Programme is a four years part-time structured training programme and the HKSA's new examinations only comprise 4 professional examinations and 1 final professional examination, it is envisaged that accounting technicians should have a better chance of obtaining the HKSA qualification in about 6 years' time.

10. The representative from HKAPGU has advised that their members are in support of the new scheme and have welcomed the undertaking given by HKSA to secure adequate places for both the Foundation and Conversion Programmes from Hong Kong's tertiary institutions upon demand.

11. In response to members' enquiries as to whether students currently attending an overseas course or taking a correspondence course in Hong Kong will be affected by the new scheme, representatives from HKSA have advised that under the existing policy of HKSA, they will recognise those educational institutions which are recognised by a national professional body recognised by HKSA.

12. Noting that under the HKSA's new professional accreditation system, persons who do not meet the new requisite standard of education will be required to first undertake either a Foundation Programme or a Conversion Programme, a member has asked whether this will make it more difficult for people to obtain a professional qualification. Representatives from HKSA have explained that as far as an average non-accountancy-degree holder is concerned, the new scheme should be a preferred route. For non-degree holders, it is difficult to give a definite answer on this question because the new scheme provides a structured training programme, whereas under the existing scheme they have to study on their own. They have also pointed out that people are not bound to enrol in HKSA to obtain a professional accounting qualification in Hong Kong. There are some 8% and 18% of newly registered members of HKSA in 1998 obtaining the HKSA professional qualification on the basis of the American Institute of Certified Public Accountants and the Australian Society of Certified Practicing Accountants qualifications respectively. They have also explained the different routes to obtain HKSA qualification under the existing scheme and the new scheme.

13. As regards the impact on the existing registered students, representatives from HKSA have advised that they may continue their student membership after 1 January 1999, and subject to their compliance with the bylaws, they will have until 31 December 2001 to complete the Joint Examinations. Thereafter, if the students have not yet completed the Joint Examinations, they may opt to remain in the UK ACCA Professional Examination stream or to switch over to the HKSA's new professional examinations known as the "HKSA professional programme and examinations". In the latter case, the students will have to be either accountancy degree holders or have completed the Foundation Programme or the Conversion Programme, in order to sit for the "HKSA professional programme and examinations". Representatives from HKSA have further explained that so long as the students could complete either one of the examinations by 31 December 2004, the HKSA will also recognise their qualification. As such, the existing registered students will have six years, i.e. between 1999 and 2004, to obtain their professional qualification.

14. After deliberation, the Subcommittee was of the view that the clarifications given by HKSA and deputations had addressed their concerns.


15. The Subcommittee recommends that the Amendment Bylaw be supported.

Legislative Council Secretariat
2 December 1998


Subcommittee on the
Professional Accountants (Amendment) Bylaw 1998

Membership list

Hon CHAN Kam-lam (Chairman)
Hon Edward HO Sing-tin, JP
Hon Eric LI Ka-cheung, JP
Hon SIN Chung-kai
Dr Hon LEONG Che-hung, JP

Total : 5 members