Accounting and Auditing

For once, accountants have a happy problem - how to deal with excess reserves of US$50 million

Many members of the Hong Kong Institute of Certified Public Accountants are seeking a refund, but the institute has called for a vote on March 2 to decide what should be done 

PUBLISHED : Sunday, 04 February, 2018, 2:09pm
UPDATED : Sunday, 04 February, 2018, 11:16pm

Hong Kong Institute of Certified Public Accountants (HKICPA) has a problem of plenty. It has accumulated such huge reserves – HK$390 million (US$49.86 million) – that members are clamouring for a refund.

The institute, which covers about 43,000 accountants in Hong Kong, will hold an extraordinary general meeting on March 2 to vote on whether it should refund half of the cash reserves to its members, according to a circular posted on the institute’s website.

The demand came from nearly 100 members calling for the meeting. 

“It is a nice problem to have to deal with on how to handle the huge reserves,” said Eric Tong, newly elected president of HKICPA, in an interview with the South China Morning Post. “We would be happy to let the members express their views at the EGM. The council will listen to their views and then decide how to handle the reserves.”

Tong, however, said the institute would need to keep a reasonable amount of the reserves for day to day activities, future expansion and introduction of the planned digital platforms. 

Refunds could also be offered in the form of free courses for its members. 

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The EGM will also let members vote on whether they want to directly elect the president and vice-president, instead of allowing the current practice of council members electing the executives from among themselves.

It is a nice problem to have to deal with on how to handle the huge reserves
Eric Tong, president of HKICPA

The third item on the agenda is to terminate the contract of chief executive Raphael Ding Wai-chuen and hire a global recruitment firm to seek a replacement. But the new CEO will see a “significantly reduced remuneration to a level acceptable to the general membership”, according to a statement on the HKICPA website. 

Ding’s annual pay package last year was about HK$5 million.

Regarding the chief executive’s package, Tong said the CEO has a lot of duties to carry out.

“Contrary to what the members may think, the job entails a lot so as to keep the accounting standards in line with the international levels,” said Tong, adding that the HKICPA will have to spend a reasonable sum to hire the right person for the job.

Tong said every year only 8,000 or so of the 43,000 members vote in the election to choose the council members.

“It shows a majority of accountants do not like to exercise their right to vote. I would encourage all to come out to vote during the EGM to express what they want best for the HKICPA going forward.”