Leading through uncertainty

01/28/2021

Last year, COVID-19 brought significant disruption to the personal and professional lives of everyone, including Institute members, and the challenges will likely continue. Aware of the tough journey ahead, the Institute’s new President, Raymond Cheng, is focused on helping members navigate the difficult times, succeed in business and their careers. He talks to A Plus about his top priorities for the year and the groundwork that has already been laid for a more resilient profession

Photography by Calvin Sit



Through his 22 years serving the Institute in various roles, Raymond Cheng knows the organization well and the diverse range of issues affecting the profession, from qualification to regulatory compliance to member support. “I think I have a wide understanding of the Institute, how the Institute has grown from a reasonably sized Institute of around 20,000 members 22 years ago to a huge Institute of 47,000 members,” he says. “The first committee I served on was the Financial Accounting Standards committee in 1998. I have basically served on, if not all, most of the committees.”

He has always been forthright and issues-focused, and it’s an approach it appears he’ll bring to his year as President of the Hong Kong Institute of CPAs. It is only days into his presidency and he has already announced new task forces – many that he’ll personally chair – to look squarely at the prevailing challenges in a range of areas from governance to the Institute’s relationship with the Financial Reporting Council (FRC), and come up with actionable recommendations. 

Highest on his list of priorities is helping members through Hong Kong’s worst recession on record, brought by the COVID-19 pandemic. It’s clearly something that has been on the top of Cheng’s mind, as he checks off on his fingers several areas where he thinks the Institute can support members and students.

“Let’s start with qualification,” he says, highlighting how the Institute has already done well by successfully holding COVID-secure Qualification Programme (QP) examinations in December. “The students are very happy because they were facing the risk of having no exams for the whole year. That would’ve been very detrimental to their careers, their promotions, to them becoming members.”

Cheng points out that the Institute supports current members through HKICPA Source, a career support programme, allowing firms and businesses to post their career opportunities on a portal on the Institute’s website. “Because of the downturn of the economy, some members are losing their jobs or in the middle of a transition between jobs, and they need help,” he says.

The pandemic has made it tough for many members to carry out their normal duties, especially those who need to conduct cross-border audit work. “Many of us have to travel so with the lockdown, and with a quarantine policy of 14-21 days, it is difficult for us to travel even to Mainland China.”

The Institute plays a vital role, says Cheng, in liaising between stakeholders, developing guidance on feasible auditing practices that members can follow, and all the while safeguarding the trust in Hong Kong’s capital market. “First of all, we have issued COVID-19 guidelines for our accountants in business and auditors, guiding them through different situations and circumstances. For instance, how should they be accounting for their assets because of the lockdown? Also, the Institute was in a discussion with the Hong Kong Stock Exchange (HKEX) and the Securities and Futures Commission (SFC) regarding easing the reporting requirements for listed entities because of the difficulties of carrying out an audit, which they agreed to.”

Aside from helping members navigate the pandemic, Cheng has set out 10 major areas in his work plan. They include the implementation of ‘‘one member one vote’’ for the election of the President and Vice-Presidents; anti-money laundering compliance issues; the membership admission process for registration as CPAs; implementing the new Qualification Programme examinations; investigating long working hours; the digitalization of the profession; branding of the profession; global recognition of the Institute and our members; legal and compliance issues for accountants; and career development for members.


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“With a fast-changing world and very complicated situations, maintaining professional ethics is very important.”

A multifaceted presidency

In some areas, Cheng will carry on the work of his predecessors, including on the recently revamped QP. “Last year was one of the toughest times of the QP because of the pandemic,” says Cheng, who chaired the Qualification Oversight Board in 2020. He is determined this year to move on from the delays and will get to work on rolling out the new QP. 

“When we designed the new QP, we had taken into account the perspectives of employers, the clients from their perspective, what they want from an accountant nowadays,” he says. 

Another aspect of the new QP that excites Cheng is the emphasis on ethics. “With a fast-changing world and very complicated situations, maintaining professional ethics is very important. You can see that the new QP places a lot of emphasis on ethics and that can be applied universally whether you are a practising accountant or a professional accountant in business (PAIB). Ethics are the foundation of a successful accountant,” he says. “Professional scepticism and ethical behaviour are what clients and employers want. Ethics meaning whether you have integrity when carrying out your work.”

The future success of the profession in all areas depends heavily on members’ ability to digitize, says Cheng, another area that he plans to focus on this year, particularly for small and medium practices (SMP). “Especially now with COVID, technology and digitalization is the way for SMPs. We already have a sub-committee in the SMP Committee looking into digitalization like audit automation. But that’s not enough. We will soon set up this year a digitalization committee, which will extensively look into how we can help our SMPs in terms of automating their processes. We should not only look at audit automation, but also digital accreditation to help SMPs,” says Cheng, referring to a scheme similar to what is offered by the Institute of Chartered Accountants in England and Wales which accredits software for accounting practitioners.

Business growth and diversification is also crucial for smaller firms, notes Cheng. In fact, the survival of SMPs depends on it, as Cheng knows all too well, having built his own firm, HLB Hodgson Impey Cheng Limited, from being a medium-sized taxation services firm into one of the top listed company auditors in Hong Kong. “It’s important because just focusing on auditing makes maintaining their livelihood difficult. Under our SMP Committee, we also look into diversifying the professional skills of our SMPs.”

Another area of opportunity is for Hong Kong SMPs to link up with SMPs in Mainland China, an idea Cheng came up with 10 years ago as convenor of the then SMP committee to boost cross-border work. “We understand that SMPs have limited connections and resources, unlike the Big Four. That proved to be effective especially now with the pandemic, lockdown, and with the quarantine policy. With the teaming up they can actually work like a big firm.” 

Cheng also fully intends to take on implementing the Institute’s commitment to ‘‘one member one vote’’ for the election of the Institute’s President and Vice-Presidents, a resolution passed by members at an extraordinary general meeting in March 2018. 

“Now, it is almost three years and members are chasing us as to why there is no development with respect to “one member one vote.” In terms of timetable, it’s very difficult, because we’re talking about changing the law, and that involves passing a bill at the Legislative Council which is difficult to do in a short period of time. It can take years to get this done,” he says. A consultation paper on the matter will be released very soon, he adds.

In the meantime, he says, the Institute is exploring possible processes to put in place in the interim. “Could we actually do a poll for this? Obviously, you can’t force Council members to vote according to the poll, but there’s no harm in doing something like that during the period we are trying to pass the law. We will think of other possible interim measures to address the concerns for members.”

Long working hours in Hong Kong’s accounting profession is another issue Cheng seeks to address. “I know it’s a very controversial issue but we simply must get out and face it,” he says, matter-of-factly. “This is a problem that no one wants to work on. They would say, ‘don’t let the cat out of the bag.’ But I have a different view. I think we have to address it.

“So we are setting up the Long Working Hours Steering Group. I think the first step would be to find out the root cause or causes of these long working hours before you find a solution. The aim is to come up with short, medium and long-term recommendations or solutions,” he adds. “I don’t know whether the steering group will live up to expectations but at least we don’t duck the issue.”


An outward-looking profession

The career mobility of members will be another focus of Cheng’s year as president. He believes strongly in the qualification and brand of the Hong Kong CPAs, and says that with the right advocacy work by the Institute, there are not only an increased number of cross-border roles but also overseas career opportunities as well.

Many of those opportunities, he says, are in the Greater Bay Area (GBA), with Hong Kong, along with Shenzhen, being heralded as important growth engines for driving the development of the region. “I’ve been to the Mainland recently and you can see that people are moving their business from northern China to the GBA because of the government policies, the benefits and the culture. This creates a lot of opportunities for accountants. These businesses want people like accountants to help them set up in the GBA and help them to run their business,” Cheng says.

The Institute will continue to help member firms in the GBA and PAIBs find employment in Mainland companies. “We have a GBA Committee exploring all these opportunities. But I think the first step is to have members’ understanding and support for the GBA. One of the plans of the committee is to try to, after the borders have opened, bring members to the GBA so that they can explore and understand the opportunities, and see it for themselves.”

Another important area that Cheng thinks is vital to build on is the Institute’s standing in the international accounting profession. The international outreach and thought leadership that the Institute carries out is something which burnishes the reputation of Hong Kong CPAs as they take on increasingly global roles, says Cheng, but much more remains to be done.

“I think we already have a solid foundation of global recognition, but so far we haven’t got the most out of it. Hong Kong is one of the founding members of the Global Accounting Alliance,” he says, referring to the international coalition made up of 10 of the world’s leading accounting bodies. “We already have a lot of global connections. It’s a matter of how we make use of that,” he says.

Cheng would like to see the Institute be a more active member of global alliances and international accounting organizations, to shine a light on the Hong Kong profession. “Other than attending conferences and meetings of, for example, the International Federation of Accountants Council, I think we should be finding ways to be more proactive in getting our brand out globally. How can we get recognized not only by our counterparts but also their members?”


Regulatory challenges

Cheng plans to spearhead two new task forces that will tackle two of the most pressing regulatory issues facing the profession. One is the Task Force on Legal and Compliance for Accountants, set up this year to tackle anti-money laundering matters, including issues related to the Anti-Money Laundering and Counter-Terrorist Financing (AML/CTF) Ordinance (AMLO) and recommendations of the Financial Action Task Force (FATF), the international standards setter for AML/CTF regulation around the world. As Cheng points out, the work of this task force is vital, given the fact that the Institute is responsible for AML/CTF regulation of the profession.

The road to compliance, however, hasn’t been so straightforward. “The government wants us to do more. Based on the FATF recommendations, they want us to regulate accountants working in professional entities related to accounting firms not covered by other regulators such as the Companies Registry,” Cheng explains. “The problem is those members are in very different businesses. They don’t want you to regulate their own business. So we are facing a situation whereby we have to regulate members but in order to do that you have to look into their business to see whether they have any AML issues, and that brings up a lot of objections.”

In order for the Institute to best act as the regulator for the profession regarding AML matters, and achieve mutual understanding, a more active dialogue with members is needed, says Cheng. “That’s why this year, we have set up a new task force to look into all these AML and FATF recommendations, and see how the Institute should position itself to comply with all these regulations as well as gauging views and support from members so that everything can roll out smoothly.”

Another issue, which has been settled recently, was the Institute’s requirement to obtain authorization from the applicants for membership for the Hong Kong Police Force to undertake a criminal conviction record check, and release the checking results to the Institute, and give consent to the release of fingerprints at the outset of the membership application process. This started as part of a recommendation of FATF to enhance the examination of the qualifications of candidates for the satisfaction of the “fit and proper” requirements for registration as CPAs. The Institute has liaised with the Hong Kong police, and the application form and authorization form have been revised to address members’ concerns. 

With regards to audit reform, Cheng previously served as deputy chair of the Audit Profession Reform Working Group, and was closely monitoring developments. “I was very vocal about the FRC when it started taking over some of the functions of the Institute,” he says. Now, his focus will be on handling and responding to recommendations the FRC made in a recent report on the Institute’s performance. “The report had made quite a number of recommendations and we’re not rejecting them but we need time to communicate more with the FRC.”

“The reason why we were surprised by the report published, I think, is the lack of communication between the Institute and the FRC and that’s why we will set up another task force, which I’ll be chairing, focusing on that particular issue and to work closely with the FRC. I’m already in communication with its Chairman.”



Cheng has served the Institute for over 22 years in various roles, starting with the Financial Accounting Standards Committee in 1998.


“I want to see accountants playing a leading role in the community and in the economy.”

A team player

Cheng says becoming an accountant was almost natural. “I come from a family of accountants with three generations of CPAs serving the profession, playing different roles and occupying different capacities. The inspiration came from the genes, the family culture and the understanding of the life of accountants since I was young.”

He received his CPA training while working at the Big Four in London, and now specializes in corporate audits at his firm. He was appointed managing partner of the firm in 2010, and chairman eight years later. He is proud of being an auditor. “The most interesting part of being an auditor is that you are not only getting to meet people from all walks of life but you get to understand and learn the elements and key to success for your clients of different industries,” he says. 

Since that first Institute committee appointment in 1998, Cheng has been passionate about supporting the profession. He cites being the longest serving Council member, alongside his appointment as President, as one of the most fulfilling moments of his career so far. “The other one would be getting elected as committee member of the 2016-2021 Chief Executive of the HKSAR Election Committee Subsector Ordinary Elections (Accountancy Subsector),” he adds. “I have many ideas about how the profession could develop along with the fast-changing environment. I want to see accountants playing a leading role in the community and in the economy.”

Outside of work, Cheng is actively involved in charity work, and has volunteered for good causes for most of his life, firstly in the United Kingdom when he was young, in Hong Kong and also in Guangxi Province. “Accountants are in ideal positions for community services as we should have the best knowledge in directing resources to the people most in need,” he says. He also strikes a work-life balance through his love of sports. He has played for the Institute’s golf team as well as played in the Institute’s football tournaments, winning four silver trophies and one gold.


With the experiences he has gained, both within the Institute and outside it, Cheng believes now is the time for him to draw on it all to help build a better profession. “I can eventually put what I have learned, accumulated, seen and experienced for last 22 years into practice and demonstrate to members what I have manifested.” 


Raymond Cheng’s 10 focus areas for the year include: the implementation of ‘‘one member one vote’’ for the election of the President and Vice-Presidents; anti-money laundering compliance issues; the membership admission process for registration as CPAs; implementing the new Qualification Programme examinations; investigating long working hours; the digitalization of the profession; branding of the profession; global recognition of the Institute and our members; legal and compliance issues for accountants; and career development for members.