- Question 4 27 Marks Peter Wong A Fellow Member Of Hkicpa Is The Financial Controller Of A Multinational Corporation 1 (78.35 KiB) Viewed 99 times
- Question 4 27 Marks Peter Wong A Fellow Member Of Hkicpa Is The Financial Controller Of A Multinational Corporation 2 (74.19 KiB) Viewed 99 times
- Question 4 27 Marks Peter Wong A Fellow Member Of Hkicpa Is The Financial Controller Of A Multinational Corporation 3 (74.19 KiB) Viewed 99 times
Question 4 (27 marks) Peter Wong, a fellow member of HKICPA, is the financial controller of a multinational corporation in Hong Kong. For the year of assessment 2021/22, he received an annual salary of $3,000,000, and a cash bonus of $700,000. Peter lives in an apartment in Causeway Bay which is owned by Peter's mother. Peter repaid the mortgage bank loan (including $120,000 interest) for the apartment during the year. Peter commutes from home to office by his own car and incurred $30,000 car expenses during the year of assessment 2021/22. He paid a course fee of $20,000 for a diving class and bought four charity show tickets at a cost of $8,000 from Tung Wah Group of Hospitals during the year. Peter was divorced in 2018 and he is maintaining his 19-year old son, who is currently studying a part-time university degree with the Chinese University of Hong Kong. His employer paid the school fee for his son in the amount of $80,000 during the year. His father is 72 years old and lives in a nursing home in Shenzhen, China. Peter paid a total of $180,000 to the nursing home during the year of assessment 2021/22. Peter thinks he is a lisciplined taxpayer in the past years and the chances of his tax return being audited in this year'should be very remote. He wants to minimize his net chargeable income in the 2021/22 tax return so he can pay less tax and save more money. He intends to under-report his cash bonus of $700,000 paid by his employer. Further, he will not report the school fee of $80,000 paid by his employer. He also plans to claim the deductions of (1) car expenses of $30,000; (2) self-education expenses of $20,000 (for course fee of diving class); (3) donation of $8,000; (4) elderly residential care expense; (5) home loan interest of $120,000. He also wishes to claim (1) married person's allowance; and (2) child allowance. Required: (a) Name FIVE stakeholders in this case. (5 marks) (b) Advise Peter on his tax position on his intended actions for the year of assessment 2021/22 (10 marks) (c) Discuss the ethicality of Peter's behaviour in terms of the standard of Confucian Ethics. (6 marks) (d) Advise Peter on the potential consequences if a member of the HKICPA is found to violate the HKICPA's Code of Ethics. (6 marks) Total for Question 4: 27 marks
Question 4 (27 marks) Peter Wong, a fellow member of HKICPA, is the financial controller of a multinational corporation in Hong Kong. For the year of assessment 2021/22, he received an annual salary of $3,000,000, and a cash bonus of $700,000. Peter lives in an apartment in Causeway Bay which is owned by Peter's mother. Peter repaid the mortgage bank loan (including $120,000 interest) for the apartment during the year. Peter commutes from home to office by his own car and incurred $30,000 car expenses during the year of assessment 2021/22. He paid a course fee of $20,000 for a diving class and bought four charity show tickets at a cost of $8,000 from Tung Wah Group of Hospitals during the year. Peter was divorced in 2018 and he is maintaining his 19-year old son, who is currently studying a part-time university degree with the Chinese University of Hong Kong. His employer paid the school fee for his son in the amount of $80,000 during the year. His father is 12 years old and lives in a nursing home in Shenzhen, China, Peter paid a total of $180,000 to the nursing home during the year of assessment 2021/22. Peter thinks he is a disciplined taxpayer in the past years and the chances of his tax return being audited in this year should be very remote. He wants to minimize his net chargeable income in the 2021/22 tax return so he can pay less tax and save more money He intends to under-report his cash bonus of $700,000 paid by his employer. Further, he will not report the school fee of $80,000 paid by his employer. He also plans to claim the deductions of (1) car expenses of $30,000; (2) self-education expenses of $20,000 (for course fee of diving class); (3) donation of $8,000; (4) elderly residential care expense; (5) home loan interest of $120,000. He also wishes to claim (1) married person's allowance; and (2) child allowance. Required: 1 (a) Name FIVE stakeholders in this case, (5 marks) (b) Advise Peter on his tax position on his intended actions for the year of assessment 2021/22 (10 marks) (c) Discuss the ethicality of Peter's behaviour in terms of the standard of Confucian Ethics. (6 marks) (d) Advise Peter on the potential consequences if a member of the HKICPA is found to violate the HKICPA's Code of Ethics (6 marks) [Total for Question 4:27 marks)