Part C — Additional HK Ethical Requirements

📋 Part C — Section Overview

Section	Topic	Pages	Key Concept
C-100	Introduction	1	Part C integral to the Code
C-200	Changes in a Professional Appointment	9	Professional clearance before accepting
C-300	Change of Auditors of Listed Issuers	4	SEHK disclosure framework
C-400	Unlawful Acts or Defaults by Clients	20	Reporting fraud, tax evasion, ICAC
C-500	Unlawful Acts by Employer	5	Employee escalation & whistleblowing
C-600	Ethics in Tax Practice	2	Tax avoidance vs tax evasion
C-700	Corporate Finance Advice	9	Conflict management, Takeovers Code
C-800	Use of Designations & Logo	2	CPA title protection
C-900	Practice Promotion	4	Advertising rules, no cold-calling
C-1000	Client's Monies	2	Segregated accounts, monthly reconciliation

章節	主題	頁數	核心概念
C-100	引言	1	Part C 是守則不可或缺的部分
C-200	變更專業委任	9	接受任命前的專業清關
C-300	上市公司更換核數師	4	聯交所披露框架
C-400	客戶非法行為或違約	20	舉報欺詐、逃稅、ICAC
C-500	僱主非法行為	5	員工升級舉報及吹哨
C-600	稅務實務道德	2	合法避稅 vs 非法逃稅
C-700	企業融資建議	9	衝突管理、收購守則
C-800	名稱及標誌使用	2	CPA 頭銜保護
C-900	業務推廣	4	廣告規則、禁止冷訪
C-1000	客戶資金	2	獨立帳戶、每月對帳

📋 C-200 — Changes in a Professional Appointment (43 paragraphs)

Professional Clearance — The Core Requirement

Before accepting nomination as auditor, the incoming auditor must write to the existing auditor to obtain professional clearance (200.1). The existing auditor must reply promptly without causing undue hindrance (200.2).

Key Obligations

Party	Must Do	Must NOT Do
Incoming Auditor	Request client permission; write to existing auditor for clearance (200.3, 200.6)	Accept nomination if client refuses permission to communicate (200.5)
Existing Auditor	Reply without delay; disclose professional concerns (200.7, 200.20)	Cause undue hindrance to the change (200.2)
Client	Grant permission; inform existing auditor of proposed change (200.17)	Refuse permission without consequence — member MUST decline (200.5)

⚠️ NOCLAR exception (200.23): If existing auditor withdrew due to non-compliance with laws and regulations (NOCLAR), they must provide all facts to the proposed auditor without client consent, unless prohibited by law.

Statutory Rights on Cessation (200.38–200.43)

Under the Companies Ordinance, the outgoing auditor must give a statement of circumstances (or statement of no circumstances). May submit a cessation statement, require circulation to members, and attend + be heard at the general meeting. Qualified privilege under s.410 protects against defamation claims for statements made without malice.

Special Situations

Unpaid fees (200.33): Not a valid reason to decline nomination. Joint auditors (200.29–200.30): Same principles apply; surviving joint auditor should communicate as if a completely new appointment. Casual vacancy (200.31): Adapt procedure — obtain information from previous auditor's partners or estate administrators.

角色	必須做	不得做
接任核數師	請求客戶允許；書面聯絡現任核數師（200.3, 200.6）	若客戶拒絕允許溝通則接受提名（200.5）
現任核數師	迅速回覆；披露專業顧慮（200.7, 200.20）	對更換造成不當阻礙（200.2）
客戶	授予許可；通知現任核數師擬議變更（200.17）	拒絕許可而無後果 — 會員必須拒絕提名（200.5）

📋 C-300 — Change of Auditors of Listed Issuers (21 paragraphs)

Background

SEHK and SFC raised concerns that fee disputes were being used to disguise real reasons for auditor changes, potentially misleading the market (300.1). This section establishes a framework for enhanced disclosure.

Key Requirements

Requirement	Detail
Letter of Resignation or Termination	Outgoing auditors must prepare a letter to the audit committee and board setting out circumstances leading to resignation/termination (300.10–300.11)
Disagreements	Must be disclosed; interpreted broadly — mere difference of opinion sufficient (300.13–300.15)
Removal circular	Sent to shareholders 10 business days before general meeting (300.5)
Auditor attendance	Auditor must attend AGM to answer questions about the audit (300.5)

⛔ Do NOT resign to avoid responsibility: "Auditors should not attempt to avoid the responsibility of reporting on the financial statements by resigning" (300.8). Complete the audit first, then decline re-appointment if desired (300.9).

📋 C-400 — Unlawful Acts or Defaults by Clients (87 paragraphs — Largest Section)

Tax Irregularities — The Core Scenario

Step	Action
1. Discovery	Member discovers past tax returns were incorrect due to client deception (400.23)
2. Advise client	Advise client to make full disclosure to IRD (400.23)
3. Client refuses	Cease to act in tax matters; consider whether can continue as auditor (400.23)
4. Notify IRD	Inform IRD of cessation but NOT the reason without client consent or legal compulsion (400.29)

Companies in Liquidation & Investigation

Situation	Auditor's Duty
Liquidation (400.56)	Give liquidator all relevant information — no breach of confidence (company's rights vest in liquidator)
Police enquiry (400.57)	Provide all relevant information to the liquidator; if liquidator reports to Secretary for Justice, auditor has statutory duty to assist
Companies Ordinance investigation (400.59)	Statutory duty to produce records, attend before inspector, answer questions — duty of confidence overridden
ICAC request (400.63–400.89)	Cooperate within professional duties; seek client consent where possible; ICAC may compel under s.14 Prevention of Bribery Ordinance

⛔ Auditor removal (400.55): If directors try to remove auditor to prevent qualified reporting — attend the meeting (s.411), submit written statement (s.422(3)), and be heard.

Sole Traders & Partnerships (400.60–400.62)

No statutory audit requirements. The member's report must make clear the significance of the association of the member's name with the accounts. For IRD enquiries where not all info can be verified — obtain answers from client and pass them on as such.

步驟	行動
1. 發現	會員發現過往報稅表因客戶欺騙而不正確（400.23）
2. 建議客戶	建議客戶向稅務局全面披露（400.23）
3. 客戶拒絕	終止稅務服務；考慮是否可繼續擔任核數師（400.23）
4. 通知稅務局	通知稅務局已終止服務但不披露原因（未經同意或法律強制）（400.29）

情況	核數師的責任
清盤 (400.56)	向清盤人提供所有相關資訊 — 不構成違反保密（公司權利歸屬清盤人）
公司條例調查 (400.59)	法定責任出示文件、出席調查及回答問題 — 保密義務被凌駕
ICAC (400.63–400.89)	在專業責任範圍內合作；盡可能尋求客戶同意；ICAC 可根據防止賄賂條例第14條強制要求

📋 C-500 — Unlawful Acts by Employer (26 paragraphs) | C-600 — Ethics in Tax Practice (12 paragraphs)

C-500 — Escalation Framework for Members in Business

Step	Action
1	Raise matter with immediate superior (500.5)
2	If superior implicated → go to next level of management (500.6)
3	If unresolved → audit committee, legal advice, resignation (500.7)
4	Whistleblowing to external authorities — last resort only (500.7)

⚠️ Document everything: Record all steps taken, dates, persons consulted, and decisions made (500.8).

C-600 — Tax Practice Ethics

Allowed	Prohibited
Assist clients within the law (600.1)	Never knowingly assist tax evasion (600.2)
Legitimate tax planning	Continue acting if client persists with improper arrangement (600.4)
Hold out as specialist — if genuinely competent (600.5)	Claim specialist expertise without genuine competence (600.5)

Key distinction: Tax avoidance = legal. Tax evasion = illegal. If client proposes improper arrangement and persists after advice → cease to act (600.4).

步驟	行動
1	向直屬上級報告（500.5）
2	若上級涉及 → 向更高層管理報告（500.6）
3	若未解決 → 審計委員會、法律意見、辭職（500.7）
4	吹哨向外部機構舉報 — 僅作最後手段（500.7）

允許	禁止
在法律範圍內協助客戶（600.1）	明知而協助逃稅（600.2）
合法稅務規劃	客戶堅持不當安排時繼續服務（600.4）
如具真實能力可自稱專家（600.5）	無真實能力而聲稱專業知識（600.5）

📋 C-700 — Corporate Finance Advice (44 paragraphs)

Conflict of Interest Management

Principle	Rule	Reference
Test	Reasonable observer would consider objectivity affected?	700.12
Automatic conflict	Any material financial gain beyond normal fees	700.12
Review frequency	Before new appointment + annually	700.13
Stale relationship	>2 years since relationship ended	700.13
Non-material conflict	Disclose in writing + obtain both clients' written consent	700.16
Lead adviser banned	Cannot act for both sides if disclosure would materially prejudice a client	700.17

Four Safeguards (700.22)

Different partners and teams for different engagements
Chinese walls — prevent leakage of confidential information between teams
Regular review by independent senior partner not involved with either client
Advise at least one client to seek additional independent advice

⚠️ Sole practitioners: Safeguards 1–3 not available — must account for this in decision-making (700.23).

Documents & Takeovers Code

Firm responsible for anything published under its name (700.30). All documents must be justifiable on objective examination of facts (700.26). Must comply with Codes on Takeovers and Mergers and Share Buy-backs (700.32).

原則	規則	參考
測試	合理觀察者會認為客觀性受影響？	700.12
自動衝突	超出正常費用的任何重大經濟利益	700.12
審查頻率	新委任前 + 每年	700.13
陳舊關係	關係終止超過2年	700.13
非重大衝突	書面披露 + 獲取雙方客戶書面同意	700.16
主導顧問禁止	若披露將嚴重損害客戶利益則不得同時為雙方服務	700.17

📋 C-800, C-900, C-1000 — Designations, Promotion & Client Monies

C-800 — Use of Designations & Logo (11 paragraphs)

Designation	Who May Use
"Certified Public Accountant (Practising)" / "CPA (Practising)"	Members holding valid practising certificate only (800.1)
"Certified Public Accountant" / "CPA"	All HKICPA members — but must not imply in public practice (800.2)
HKICPA logo	Only with Institute permission and per guidelines (800.4)

Firm names must not be misleading (800.3). AFRC issues practising certificates (800.6).

C-900 — Practice Promotion (20 paragraphs)

✅ PermittedNewspapers, directories, brochures, websites, seminars, sponsorships

❌ ProhibitedCold-calling, comparative advertising naming competitors, superiority claims

All promotion must be truthful, in good taste, not disparaging, not unrealistic (900.1). Cross-border promotion must comply with local regulations (900.19).

C-1000 — Client's Monies (10 paragraphs)

Requirement	Detail
Segregation	Keep in separate client bank accounts (1000.2)
Reconciliation	At least monthly (1000.4)
Return	Promptly when no longer needed (1000.6)
Usage	Only for the purpose given (1000.5)

名稱	誰可使用
「Certified Public Accountant (Practising)」/「CPA (Practising)」	僅持有效執業證書的會員（800.1）
「Certified Public Accountant」/「CPA」	所有 HKICPA 會員 — 但不得暗示從事公眾執業（800.2）
HKICPA 標誌	僅獲公會許可並依指引使用（800.4）

要求	詳情
隔離	存放於獨立客戶銀行帳戶（1000.2）
對帳	至少每月一次（1000.4）
歸還	不再需要時立即歸還（1000.6）
使用	僅用於給予時的目的（1000.5）

Part C — Additional HK Ethical Requirements (Condensed)

📋 Part C — Section Overview

📋 Part C — 章節總覽

📋 C-200 — Changes in a Professional Appointment (43 paragraphs)

Professional Clearance — The Core Requirement

Key Obligations

Statutory Rights on Cessation (200.38–200.43)

Special Situations

📋 C-200 — 變更專業委任（43段）

專業清關 — 核心要求

主要義務

📋 C-300 — Change of Auditors of Listed Issuers (21 paragraphs)

Background

Key Requirements

📋 C-300 — 上市公司更換核數師（21段）

背景

📋 C-400 — Unlawful Acts or Defaults by Clients (87 paragraphs — Largest Section)

Tax Irregularities — The Core Scenario

Companies in Liquidation & Investigation

Sole Traders & Partnerships (400.60–400.62)

📋 C-400 — 客戶非法行為或違約（87段，最大章節）

稅務不當行為 — 核心流程

公司清盤與調查

📋 C-500 — Unlawful Acts by Employer (26 paragraphs) | C-600 — Ethics in Tax Practice (12 paragraphs)

C-500 — Escalation Framework for Members in Business

C-600 — Tax Practice Ethics

📋 C-500 — 僱主非法行為（26段）| C-600 — 稅務實務道德（12段）

C-500 — 受僱會員的升級框架

C-600 — 稅務實務道德

📋 C-700 — Corporate Finance Advice (44 paragraphs)

Conflict of Interest Management

Four Safeguards (700.22)

Documents & Takeovers Code

📋 C-700 — 企業融資建議（44段）

利益衝突管理

四項保障措施（700.22）

📋 C-800, C-900, C-1000 — Designations, Promotion & Client Monies

C-800 — Use of Designations & Logo (11 paragraphs)

C-900 — Practice Promotion (20 paragraphs)

C-1000 — Client's Monies (10 paragraphs)

📋 C-800, C-900, C-1000 — 名稱、推廣及客戶資金

C-800 — 名稱及標誌使用（11段）

C-900 — 業務推廣（20段）

C-1000 — 客戶資金（10段）

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