Accountants open to regulatory reform
Accountants in Hong Kong are keeping an open mind over moves to tighten regulations for auditors of listed companies.
Alvin Wong Tak-wai, president of the Hong Kong Society of Accountants (HKSA), said the society would be 'absolutely open-minded on any possible reform plans suggested by the government'.
But he warned against any radical moves similar to those taken in the United States.
He was speaking at a press conference ahead of the three-day 16th World Congress of Accountants beginning today.
Sources told the South China Morning Post that government officials recently held talks with senior officials of the Big Four international accounting firms about stepping up regulations in the wake of American scandals.
Possible options include the US model of an independent body to regulate listed auditors or the European approach of adding more independent directors to the HKSA board.
The society has already proposed a law change, increasing the independent directors on its 16-member board from two to four.
Secretary for Financial Services and the Treasury Frederick Ma Si-hang said at a separate function yesterday that the government was watching overseas accounting reforms but had not made a decision for Hong Kong.
'The self-regulatory framework of the accounting industry has been running well. But the government is closely monitoring the progress of reform plans in overseas markets,' Mr Ma said.
Mr Wong said the society did not agree that the government should follow the US lead of setting up an independent oversight board to regulate auditors.
'The US corporate failures have led to a confidence crisis which prompted the US regulators to go for a radical move,' Mr Wong said.
'I do not consider Hong Kong's accounting industry is having the same sort of confidence crisis as in the US. There is no need to go for such a move.'
Mr Wong said the society had already reformed itself since the 1998 financial crisis to increase its transparency, accountability and public involvement.
He cited as an example the society's move to increase its independent directors. The proposed legislation would also see two lay members added to its five-member disciplinary committee to hear allegations of auditor malpractice.
Rene Ricol, who was yesterday appointed president of the International Federation of Accountants, which represents more than 2.4 million accountants, said that industry bodies had to accept the self-regulatory model would be shifted to a so-called 'mixed regulatory model', with more government and public involvement.
