Preparation of accounting records and financial statements for an audit client - Revised Code of Ethics for Professional Accountants (effective from 1 January 2011)

Code of Ethics for Professional Accountants was revised in June 2010 and effective from 1 January 2011. The revised Code draws attention in assessing potential threats to independence and implementing safeguards to eliminate or reduce the threat to an acceptable level. The revised Code continues to allow members to provide accounting services to audit clients upon certain conditions being satisfied.

For audit clients that are not public interest entities, an audit firm may provide accounting and bookkeeping services to the clients where the services are of a routine or mechanical nature so long as any self-review threat created is reduced to an acceptable level. It is necessary to evaluate the significance of any threat created and employ appropriate safeguards.

For audit clients that are public interest entities, an audit firm shall not provide accounting and bookkeeping services to the clients, except in emergency situations.

The revised Code also set out requirements in relation to serving as a director or officer of an audit client:

- No partner or employee shall serve as a director or officer of an audit client.

- No partner or employee shall serve as a company secretary of an audit client unless the duties and functions undertaken are limited to those of a routine and formal administrative nature such as the preparation of minutes and maintenance of statutory returns, and are permitted by law.

For details, please refer to Code of Ethics for Professional Accountants (revised in June 2010) issued by HKICPA.