Executive immunity backed in fraud war
The Hong Kong Society of Accountants (HKSA) will propose granting legal immunity to senior company executives who report suspected corporate fraud, according to a source.
The move was a counter-proposal to the Government's suggestion that auditors be granted immunity from legal liability when reporting malpractice to regulators, an HKSA source said.
The Government's proposal came after a string of financial problems at listed companies raised questions over the role of reporting accountants.
Accountants strongly opposed the proposal, saying it would undermine their relationships with clients.
The HKSA's counter-proposal is seen as an attempt by the professionals to spread the burden of responsibility for action.
'In fact, some senior staff - like financial controller or company secretary - are closer to the company's confidential information, so they should also have immunity to report frauds,' the source said.
Secretary for Financial Services Rafael Hui Si-yan said in March the Government would introduce legislative changes by the end of the year to provide statutory protection to auditors of listed companies who reported malpractice to the Securities and Futures Commission or stock exchange.