Code of Ethics for Professional Accountants

1 code of Ethics for Professional Accountants COE Revised February 2018 Effective on 1 January 2011 (including subsequent amendments as indicated) code OF Ethics FOR Professional Accountants 2 COE (Revised February 2018) COPYRIGHT Copyright 2018 Hong Kong Institute of Certified Public Accountants This code of Ethics for Professional Accountants is based on the code of Ethics for Professional Accountants of the International Ethics Standards Board for Accountants , published by the International Federation of Accountants (IFAC) in July 2016 and is used with permission of IFAC.

2 Responding to Non-Compliance with Laws and Regulations, ISBN 978-1-60815-289-6 July 2016 by the International Federation of Accountants . This code of Ethics contains IFAC copyright material. Reproduction within Hong Kong in unaltered form (retaining this notice) is permitted for personal and non-commercial use subject to the inclusion of an acknowledgment of the source. Requests and inquiries concerning reproduction and rights for commercial purposes within Hong Kong should be addressed to the Director, Operation and Finance, Hong Kong Institute of Certified Public Accountants , 37/F.

3 , Wu Chung House, 213 Queen's Road East, Wanchai, Hong Kong. All rights in this material outside of Hong Kong are reserved by IFAC. Reproduction of code of Ethics outside of Hong Kong in unaltered form (retaining this notice) is permitted for personal and non-commercial use only. Further information and requests for authorisation to reproduce for commercial purposes outside Hong Kong should be addressed to the IFAC at code OF Ethics FOR Professional Accountants 3 COE (Revised February 2018) code OF Ethics FOR Professional Accountants CONTENTS Pages PREFACE.

4 5 PART A: GENERAL APPLICATION OF THE code .. 6 100 Introduction and Fundamental Principles .. 7-11 110 Integrity .. 12 120 Objectivity .. 13 130 Professional Competence and Due Care .. 14 140 Confidentiality .. 15-16 150 Professional Behavior .. 17 PART B: Professional Accountants IN PUBLIC PRACTICE .. 18 200 Introduction .. 19-22 210 Professional Appointment .. 23-25 220 Conflicts of Interest .. 26-29 225 Responding to Non-Compliance with Laws and Regulations .. 30-39 230 Second Opinions .. 40 240 Fees and Other Types of Remuneration .. 41-42 250 Marketing Professional Services.

5 43 260 Gifts and Hospitality .. 44 270 Custody of Client Assets .. 45 280 Objectivity All Services .. 46 290 Independence Audit and Review Engagements .. 47-86 291 Independence Other Assurance Engagements .. 87-108 PART C: Professional Accountants IN BUSINESS .. 109 300 Introduction .. 110-112 310 Conflicts of Interest .. 113-114 320 Preparation and Reporting of Information .. 115 330 Acting with Sufficient Expertise .. 116 340 Financial Interests, Compensation and Incentives Linked to Financial Reporting and Decision Making .. 117-118 350 Inducements.

6 119-120 360 Responding to Non-Compliance with Laws and Regulations .. 121-127 PART D: ADDITIONAL ETHICAL REQUIREMENTS .. 128 400 Introduction .. 129 410 Unlawful Acts or Defaults by Clients of Members .. 130-148 411 Unlawful Acts or Defaults by or on Behalf of a Member s Employer .. 149-152 420 Use of Designations and Institute s 153-154 430 Ethics in Tax Practice .. 155-156 431 Corporate Finance Advice .. 157-165 440 Changes in a Professional Appointment .. 166-173 441 Change of Auditors of a Listed Issuer of The Stock Exchange of Hong Kong .. 174-177 450 Practice Promotion.

7 178-181 460 Clients Monies .. 182-183 code OF Ethics FOR Professional Accountants 4 COE (Revised February 2018) PART E: SPECIALIZED AREAS OF PRACTICE .. 184 500 Professional Ethics in Liquidation and Insolvency (Effective on 1 April 2012) .. 185-204 PART F GUIDELINES ON ANTI-MONEY LAUNDERING AND COUNTER-TERRORIST FINANCING FOR Professional Accountants (Effective on 1 March 2018) .. 205 600 Overview and 206-210 610 AML/CFT Policies, Procedures and Controls .. 211-214 620 Customer Due Diligence .. 215-228 630 Ongoing Monitoring .. 229-230 640 Making Suspicious Transaction Reports.

8 231-238 650 Financial Sanctions and Terrorist Financing .. 239-241 660 Record Keeping .. 242-243 670 Staff Hiring and Training .. 244-245 Appendix A E .. 246-268 DEFINITIONS .. 269-274 EFFECTIVE DATE .. 275-276 APPENDIX 1: Sample code of Conduct under the Prevention of Bribery 277-283 APPENDIX 2: Comparison with the IESBA code of Ethics for Professional 284 code OF Ethics FOR Professional Accountants 5 COE (Revised January 2015) PREFACE This Preface has been approved by the Council of the Hong Kong Institute of Certified Public Accountants (the Institute ) for publication.

9 1. Pursuant to section 18A of the Professional Accountants Ordinance, Council may, in relation to the practice of accountancy, issue or specify any statement of Professional Ethics required to be observed, maintained or otherwise applied by members of the Institute. 2. The Institute, as a member of the International Federation of Accountants (IFAC), is committed to the IFAC s broad objective of developing and enhancing a coordinated worldwide accountancy profession with common standards. In working toward this objective, IFAC develops guidance on Ethics for Professional Accountants .

10 IFAC believes that issuing such guidance will improve the degree of uniformity of Professional Ethics throughout the world. 3. As an obligation of its membership, the Institute is obliged to support the work of IFAC by (a) informing its members of every pronouncement developed by IFAC, and (b) implementing those pronouncements, when and to the extent possible under local circumstances. 4. The Institute has determined to adopt the IESBA code of Ethics for Professional Accountants issued by the IFAC International Ethics Standards Board of Accountants (IESBA) as the ethical requirements for its members.