HKSA flags Web security standards
The Hong Kong Society of Accountants (HKSA) plans in June to introduce Web-assessment standards similar to those in North America to enhance the protection of on-line shoppers.
The standards are necessary in light of the rapid development of Internet related business, HKSA president Kam Pok-man said.
'With the increasing number of customers who shop on-line, it is necessary to have recognised standards to assess the security levels of the Web sites,' he said.
The standards will allow public certified accountants who have taken a course on Web assessments to issue a Webtrust seal to sites that meet certain standards.
The HKSA has signed a letter of intent with the American Institute of Certified Public Accountants and the Canadian Institute of Chartered Accountants that will allow it to adopt the organisations' standards, HKSA councillor Michael Chan Kee-huen said.
The standards are mainly related to security measures.
For example, the North American Web-site seal confirms that operators ensure electronic transactions comply with a mutual agreement between buyers and sellers.
The operator also ensures customers' data obtained in any transaction, such as credit card information, is not leaked to others.
The HKSA also proposed changing the accounting treatment on pre-operating costs, which would affect software and Internet companies, Mr Kam said.
The new treatment would require all expenditure in start-up activity, including advertising expenses, to be treated as a loss incurred in that year's profit and loss account.
At present, it is a common practice for companies to capitalise pre-operating costs then amortise such costs over several years.
'The accounting treatment on pre-operating cost has become a concern in the set-up of many high-technology companies,' Mr Kam said.
'The new accounting treatment is a more appropriate way to reflect the cost of the start-up of companies,' he said.
'The interests of investors trading in the newly set up hi-tech or Internet related stocks have prompted the HKSA to amend the rules to enhance investors' protection.'