A law to hold auditors criminally liable if they fail to declare a company's accounting problems is set to pass after the city's two largest political parties yesterday said they backed it.
The 2,000-page Companies Bill, being debated in the Legislative Council, aims to modernise the outdated Companies Ordinances.
Accountants have been lobbying lawmakers hard in the past two weeks to remove the criminal liability provision. But the bill is expected to be approved by Legco after the Democratic Party and Democratic Alliance for the Betterment and Progress of Hong Kong (DAB) told the South China Morning Post yesterday they would back it.
'Although many accountants worry about the liability, there is a public interest so we support the law change,'' said DAB legislator Starry Lee Wai-king, herself an accountant.
Paul Chan Mo-po, legislator for the accountancy sector, yesterday withdrew a proposed amendment to the bill that would have removed the criminal liability provision. He told the Post he will ask lawmakers to accept an amendment that accountants only face criminal liability if they failed to make the declaration 'knowingly' and not 'recklessly'' as stipulated in the bill.
'I agree there is a public interest issue here. If an accountant knows about the problem and does not make the declaration, they should face liability,'' Chan said.
Chan will still lobby lawmakers to vote down a provision that would make junior accountants liable. He wants only qualified accountants who have signed the audit report to face criminal sanctions.