Acct 3610 Syllabus

Hong Kong University of Science and Technology
Department of Accounting ACCT 3610 Functions of law in Society and Business
Spring 2012-2013

Course Duration: 1 Semester

Medium of Instruction: English

Textbooks
1) An Introduction to Hong Kong Business Law: Vanessa Stott (Fourth edition, Longman)
2) Introduction to Law in the Hong Kong SAR: Ian Dobinson and Derek Roebuck (Second Edition, Sweet Maxwell)

Instructor
Instructor Room Email Consultation

Charles Lam 3433 [e-mail] TBA (By appointment)

Course Objectives:

This course is to provide students with an awareness of the overall legal framework in which businesses in Hong Kong operate so as to enable them to apply the relevant laws and practices to business problems and practical solutions. The main objective is to give students an understanding of how the society and business function in different socio-legal contexts like the legal system and process and its influence on citizens’ social rights and duties; the enforcement and honoring of agreement between private citizens, the use of business organizations in commercial society, the relationship between employee and employer from social and legal perspectives, the growing importance of business ethics and corporate social responsibilities etc.

Apart from the traditional presentation of knowledge, the pedagogical method used will be coaching—in the sense that we want to fully develop the potentials of students. You will be given a number of case studies where the clients are seeking your business and legal advice. In the process of analysis, students should be able to critically identify the issues involved, discuss the legal principles and then apply them to solve the issues. We also welcome students’ comments on the validity of the principles and their recommendations. In the process of identifying the legal issues, students should be able to point out the defects of the law and suggest ways for legal reforms. Therefore, analytical capacity, independent thinking and development of original ideas and reasoning are the essences of this course.

Intended Learning Outcomes Approach

Law is not an abstract subject. It can be very practical, useful and inspiring. What we set out to do is to start with the introduction of some basic legal concepts supported by some real-life examples and then gradually develop students’ legal thinking and reasoning through doing case analysis. Progression within the course level is the very essence of the intended learning outcomes approach. Throughout the semester, students have to work on a group basis. Case studies and hypothetical examples will be designed to train students’ analytical skills and logical power. TAPPs will be used to facilitate the classroom discussion. Besides, students are expected to work closely as a team on the group project to deal with some socio-legal issues like business ethics and corporate social responsibilities, the social impact of minimum wage protection and the socio-legal implications of jury trial etc. Students are required to examine what are the socio-legal issues involved, discuss the relevant legal principles to deal with such issues and see whether they are adequate enough. Further, by doing a group project on some topical legal issues related to business and society, students can work as a team and learn from each other. Furthermore, the examination will be designed to meet the learning outcomes. Students will be tested on some basic legal concepts first and then eventually be able to deal with more complicated scenario-typed questions.

In the process of analysis, students should be able to understand the legal principles and apply them to resolve the legal issues. Through business case analysis, this course will train students’ legal reasoning ability. The legal reasoning is part of the social scientific approaches, which requires the students to apply their minds critically to business scenarios and put forward arguments in debates and arrive at a just and fair solution by interpreting the relevant legislation and well-established cases. In addition, by discussing the rights and duties as a citizen and the importance of ethical responsibility, the course will train students to be a responsible and global citizen.

Learning outcomes:

1. To develop students’ ability to apply legal knowledge studied to situations they are likely to encounter in their daily life and future careers.
2. Upon completing the course, students should be able to: i) Discuss the extent of the law in reflecting the social norms prevailing in the society ii) Show an ability to identify and understand relevant legal issues which may arise in the context of the students’ future occupations; and iii) Recognize the importance of the law as a responsible citizen and member of the workforce. iv) Grasp the development of the society by analyzing different areas and functional sectors of the law. Examine the social contract between an individual and the State. v) Develop students’ common sense in appreciating the development socio-legal issues in Hong Kong society. vi) Identify the Hong Kong legal system, the court system and the sources of Hong Kong law and evaluate the operation of the legal system on litigants’ rights and duties. vii) Critically analyze the socio-legal impacts for inviting jury to participate in the judicial making process. viii) Explain and identify the essential elements of a valid contract and the remedies available in case of a breach of contract. ix) Explain the role of employment law on job-related issues and employment disputes. x) Evaluate the effectiveness of employment law in addressing the social issues of disparity between the rich and the poor xi) Explain the law of torts and the right to compensation and damages. xii) Discuss the respective advantages and disadvantages of different forms of business organizations.

3. Students are expected to develop selected skills and attitudes: analytical and critical thinking, effective communication and team work.

4. Students are expected to develop critical and creative skills by analyzing the legal issues, applying the legal principles to a given business decision-making scenario, referring to the well-established cases and Ordinances in resolving legal problems.

5. Students should be able to appreciate the importance of ethical responsibility, identify the ethical dilemmas, apply the ethical standards and model like “Ethics Plus” model to resolve the ethical challenges and realize the consequences of breaching the ethical standards.

This course concerns the rights of an individual in society and how can one enforce his rights in the eyes of the law. The fundamental belief is that the adversarial legal system serves its function in effectively honoring an individual’s right to integrity of his physical body, his right to private property ownership and right to reputation in society and a number of rights and freedoms closely associated in a free society like Hong Kong. Students should be able to judge under what situations will they owe a duty of care and responsibilities to the other and what acts will contravene the social norms and morality prevailing in the society. Students can make their own judgment and interpretation as to how far these responsibilities go and what are the effects of breaching these commonly shared values. If they were the legislators, how would they amend the law to meet the needs of the society and honor the social contract between an individual and the State. In addition, we aim at instilling the values of reasonableness, equality, justice, transparency, plurality and professionalism into the minds of the students so as to allow them to rise up to the challenge as a global and ethical member of the society.

Keyword syllabus:
1. Corporate law
--Corporations and legal personality: sole traders, partnerships and companies, private and public companies and the effect of separate legal entity
--The limited company-distinguished from other types of business organizations
--The doctrine of corporate personality and its implications
--Common law and statutory exceptions to the doctrine of corporate personality
--The relationship of corporate personality to limited liability
--Company formations: incorporation procedures, content, alteration and legal effect of the memorandum and articles of association, object clauses and the contractual capacity of a company, abolition of the doctrine of ultra vires and its legacy, raising of capital and charges, share capital and loan capital i.e. the use of corporate entity to raise capital for business operation.
Readings:
Vanessa Stott, An Introduction to Hong Kong Business law, Chapter 12
Reference book:
Vanessa Stott, Hong Kong Company Law, Chapter 1 and 3

2. Legal System from socio-legal perspectives (Topic I)-What law is about?

--What is law?
--The Rule of law vs Rule by law
--Why do we have law?
--Classifications of law
--Substantive and procedure law
--Common law and legislation
--Common law and equity
--Criminal law and civil law
--Evidence and the burden of proof

Readings:
Vanessa Stott, An Introduction to Hong Kong Business law, Chapter 1
Ian Dobinson and Derek Roebuck, Introduction to Law in the Hong Kong SAR, Chapter 1, 2

3. Legal System from socio-legal perspectives (Topic II)-Where law comes from; How law is created; How law is administrated?; The Profession

--Sources of law
--Laws enacted by the SAR
--Legislation and case law
--Rules of equity
--Basic law—constitutional framework as provided in the Basic law
--Code of Qing Dynasty
-- Analyze the court system in Hong Kong: operation of the courts and tribunal systems—Court of Final Appeal, Court of Appeal, Court of First Instance, District Court, Magistrate’s Court, Small Claims Tribunal, Labor Tribunal, Lands Tribunal etc.
--The work of solicitors and barristers
--Discuss the division of responsibilities between the judge and the jury.
--What is the rationale for inviting jury to participate in the judicial making process?
--Selected legal issues to demonstrate the legal thinking process—For instance, what are the legal consequences for a business trader who provides misleading information in a business agreement and under what situations would it be set aside by the customers?
Readings:
Vanessa Stott, An Introduction to Hong Kong Business law, Chapter 1
Ian Dobinson and Derek Roebuck, Introduction to Law in the Hong Kong SAR, Chapter 3, 4, 6, 9

4. The Law of Contract
--Identify the essential elements of a valid agreement between business traders and customers and examine the terms of a business agreement.
--Formation of contract: Offer, acceptance, consideration, intention to be legally bound
--Capacity to enter into a contract
--Enforceability of oral contract, written contract and contract under seal
--Content of contracts: Contractual terms and exemption clauses (in particular common law control and statutory control of exemption clauses)
--the Law of Misrepresentation
Readings:
Vanessa Stott, An Introduction to Hong Kong Business law, Chapter 2

5. The Law of Torts—Individual’s right to integrity of his physical body, his right to private property ownership and right to reputation in society and other social rights
--Discuss a group of social rights in a free society like Hong Kong
--Classifications of tort: assault, battery, false imprisonment, nuisance, trespass to the property/land and defamation
--Discuss an individual’s right to his physical body, his right to private property ownership and his right to reputation in society.
--Negligence: duty of care, proximity, breach of duty of care, res ipsa loquitur, causation of damages, remoteness, foreseeability and defenses
-To what extent did the concept of duty of care reflect the principle of taking care of your neighbor and the policy reasons to restrict its extension and applicability.
--Professional negligence: duty of care of accountants and auditors(what is the common standard of care expected by professionals in the course of discharging their duties?
Readings:
Vanessa Stott, An Introduction to Hong Kong Business law, Chapter 15

6. Employment Law—Socio-legal implications between employee and employer
--Contract of employment: employees Vs independent contractors, contract of employment Vs contract for employment(why it is so important to make a difference between an employee and an independent contractor?
--Discuss the social injustice of squeezing an employee into the category of independent contractor
--Duties of employers and employees under the common law and Employment Ordinance(what are the protections given to employees under the Employment Ordinance?
--What is the rationale behind minimum wage legislation? Should we address the social issue of disparity between the rich and the poor through legislation?
Readings:
Vanessa Stott, An Introduction to Hong Kong Business law, Chapter 9

7. Business Ethics

--How the law should reflect the social norms prevailing in the society
--Duties and responsibilities of auditors and accountants(can the professional standards and rules and regulations truly reflect the ethical norms and how can it be enforceable? What is the professional ethics to be observed by accountants generally?
--Shareholders’ rights and remedies—Minority shareholders’ protection
--The code of conduct
--The “Ethics Plus” model(what approach should students take to appreciate the intrinsic value of ethics and its importance in resolving ethical dilemmas?
--corporate social responsibility

Readings:
Vanessa Stott, An Introduction to Hong Kong Business law, Chapter 15

Reference books:
Ethics in Management: A Practical Guide for Professional Accountants, Hong Kong Ethics Development Centre, Chapter 1, 2 and 3
Cheng Po Wah, Anna Sum and Francis Yuen, The Hong Kong Company Secretary’s Handbook, Chapter 11
Vanessa Stott, Hong Kong Company Law, Chapter 8 and 10

Assessment Tasks/Activities:
(Indicative of likely activities and tasks students will undertake to learn in this course. Final details will be provided to students in their first week of attendance in this course)

Types of assessment tasks/activities Points

1. Group research paper 25
2. Mid Semester Examination 25
(19 March 2013 at 18:30)
3. Final examination 50

Grading:
Points will be added up to get total points out of 100. The class curve is based on total points for the course. Grading is done on a relative (not absolute) basis. We will comply with university policy in grading.

Mid Term and Final Examination:

Mid Semester Examination will be held to assess students’ performance on selected topics and evaluate their progress so far. No make-ups will normally be given. Being absent at the examination might result in failure of the course according to university regulations.

Research Paper

Students are required to complete a research paper on a topic out of a list of topics (the list of topics is attached below). The papers are required to be submitted at the end of the semester. Details will be announced in class. Late essays may not be accepted without a sufficient explanation and even if the essay is accepted, it may be marked down. Assessment of the paper will take into account these factors:

--accurate addressing of any legal issues raised
--level of research: whether texts, journals, statute or case law
--style: footnotes, endnotes or bibliography
--originality of analysis and expression
--logical sequence
--format
--level of analysis and expression and
--correct grammar

A research paper, in order to receive an ‘A’ grade, must be a professional level paper. This includes following the instructions for the assignment, providing a good organization, basing the paper on adequate and original research, providing a complete analysis of the topic at hand, documenting all statement of facts in the paper, and making sure the spelling is accurate, the grammar is sound, and the narrative is easy for the reader to follow. An ‘A+’ paper must go beyond the above and provide an effective analysis of the topic. In order to receive an A+, a paper should provide extraordinary context, vision and originality. A paper with effective analysis and extraordinary insights—but with grammar, organizational or other fundamental errors—can obtain a grade better than it would have otherwise. The expectation in the class is that a university student who has had any research or writing background can succeed with due diligence and effort.

Format: A4 paper, 12 points Time Roman or Arial Font, Single spaced, Margins of 2.5 cm, no plastic covers and no plastic pockets.

Word Limit: There is a word limit of approximately 3500 words, excluding references.

References: All referencing must comply with either the University of Hong Kong Standard for Legal Citation (http://www3.hku.hk/hklj/03cont/03-cont.php?style) or the Oxford University Standard for Legal citation (http://www.competition-law.ox.ac.uk/published/oscola.shtml) or the APA style of referencing.
(http://lcms01.ust.hk/sbm/wsc/referencing/goodreferencing/apa_examples.html)

Plagiarism: Please note the university’s policy on plagiarism, plagiarism will result in a “F” grade. (http://www.ust.hk/vpaao/integrity/student-4.html)

Working in a group:

Students have to form a group of five to carry out the group research paper. Student groups can be formed from lecture times. (e.g. John from L1 can work with Cindy from L2 and Jay from L1). All students from that group will obtain the same grade. Besides, please sit with your group members throughout the semester for the purpose of group discussion and interaction in class. TAPPS will be used to facilitate the group discussion. Please submit your group list and chosen topic (one of the topic below) to Charles in Week 4.

List of Topics (Select ONE topic only):

1. Critically examine the liability of auditors by referring to the leading common law cases. Should liability reform of auditors be introduced to Hong Kong?
2. Critically comment on the “Review of the Trustee Ordinance and Related Matters” issued by the Financial Services and the Treasury Bureau in June 2009. Discuss, in your opinion, the necessary reforms on the law of trustee as a result of the consultation paper.
3. In what instances are there jury trials in Hong Kong, what are the reasons for having the jury trials and should jury trials be eliminated?
4. Should a new National Security (Legislative Provisions) Bill to implement Article 23 be reintroduced, what form should it take?
5. Argue for or against minimum wage legislation for Hong Kong. Apart from using minimum wage legislation, are there any other ways to protect the interests of the employees?
6. Should corporations have the same legal rights as a human being? Under what circumstances may the court lift the corporate veil?
7. We can vote, so Hong Kong is “democratic”? An assessment of the Electoral System in Hong Kong.
8. Should the decision of the Court of Final Appeal of Hong Kong be subject to the interpretation of the Standing Committee of the National People’s Congress of China?
9. To what extent are auditors liable for negligence in Hong Kong? Should there be reform in this area? To what extent may we borrow the experience from the UK’s court?
10. In light of the accounting scandals in the United States, which is the more appropriate body to determine accounting standards (the accounting profession, the stock exchange, an accounting standard setter, the Securities and Futures Commission or the Government)?
11. Why is it so important for a company to uphold the concepts of business ethics and corporate social responsibilities? Discuss the concepts in the context of different stakeholders of the company?
12. Critically assess whether the Competition Ordinance is beneficial to the well-being of the economy in Hong Kong.
13. Comment on the effectiveness of the bribery law in fighting against corruption in Hong Kong.

14. Is it feasible to incorporate the principle of corporate social responsibilities into the law of Hong Kong?
15. How to attain a delicate balance between the disclosure requirements under the Companies Ordinance and the right to privacy?
16. To what extent did Hong Kong preserve the principle of judicial autonomy and independence?
17. Critically comment on the recent consultation paper on the Contracts (Rights of Third Parties) Bill 2013.
18. “Business ethics is a high-sounding principle and businessmen tend to ignore its relevance to the domain of business operation.” Critically examine this statement and suggest ways to help business traders to realize the importance of business ethics and incorporate it into actual business practices.
19. Discuss the Hong Kong Court of Final Appeal’s decision in the Congo’s case and its impact on the interpretation of the Basic Law.
20. Should we implement the corporate rescue procedure into the law of Hong Kong?