Lawmakers have expressed mixed views on whether accountants should face criminal liability for failing to declare a company's financial problems in audits.
The 2,000-page Companies Bill, tabled last Wednesday in the Legislative Council, aims to modernise the outdated Companies Ordinances, which was first written in 1932. Yesterday's debate in Legco will continue today before it goes to a vote.
The government proposes auditors face criminal liability if their accounting reports failed to include a declaration that the financial statements were materially not in agreement with the auditor's own records. They would also face criminal liability if they failed to declare they could not obtain all the information or explanations needed for the audit.
However, the maximum fine for criminal liability would be HK$150,000 - and there would be no jail term.
Chan Kam-lam, a legislator from the Democratic Alliance for the Betterment and Progress of Hong Kong, said his party supported the government adding criminal liability.
'The accountants are gatekeepers in our financial market as regulators and investors rely on their audit reports,' Chan said.