In defence of Hongkong's high accounting standards

PUBLISHED : Saturday, 01 May, 1993, 12:00am
UPDATED : Saturday, 01 May, 1993, 12:00am

I REFER to the editorial comment which appeared under the title of ''Enthusiasm for China listings may turn sour'' (Business Post, April 23).

The author remarked that the nine Chinese enterprises expected to list on the exchange in the second half of the year are unlikely to pick up a sense of responsibility to their minority investors from their professional advisers, naming merchant bankers,accountants and lawyers.

It says: ''These professionals appear to be going to any length to win business, and will presumably agree to as many compromises or bendings of the rules as they can get away with without incurring the displeasure of the Hongkong stock exchange.'' I would query the basis for and fairness of such a remark, which I regard as a totally unfounded criticism of the accountancy profession.

The accountancy profession in Hongkong, represented by the Hongkong Society of Accountants (HKSA), has directed much effort and attention to bringing about comparable standards of financial disclosure by these China companies.

The HKSA liaises with and advises both Hongkong and China authorities on the development of accounting rules and regulations in China to meet this objective.

The HKSA has a clear objective to uphold accounting standards and rules in Hongkong.

I can assure you that in formulating the financial reporting requirements for the listing of the nine Chinese enterprises, the HKSA has not compromised its position. And it will not.

The suggestion that accountants will bend rules to secure business therefore seems to me unfounded. I am not able to find any argument in your article to support the statement.

I believe that a statement of this nature, especially appearing in a reputable newspaper as yours, would seriously affect Hongkong's credibility as a financial centre. Considerable care should be exercised when statements of such wide implications are made.

DUDLEY L. HARDING President Hongkong Society of Accountants