Accountants take lead from Hollywood in the post-Enron world

PUBLISHED : Tuesday, 19 October, 2004, 12:00am
UPDATED : Tuesday, 19 October, 2004, 12:00am

Accountants are being encouraged to take their lead from a Marilyn Monroe movie and develop The Seven Year Itch.

A new regulation introduced by the Hong Kong Institute of Certified Public Accountants means that the lead auditor of a listed company must be changed every seven years, with the auditor not being allowed to be rehired in that role by the same company for at least two years. Auditors who have already worked for a listed company for seven years will be allowed to continue at the company until the end of 2006 as a transitional measure.

The Hong Kong rule is more relaxed than the five-year rotation in the United States, but the measure is in line with international standards.

It has been introduced as a result of the accounting scandals exposed by the collapse of Enron Corp three years ago.

new name inspires speech

Accountants are also having to get used to a recent name change for their professional body - from the Hong Kong Society of Accountants to the Hong Kong Institute of Certified Public Accountants.

President Roger Best was certainly the best person at getting the message across at last week's conference on corporate governance. He spent the whole of his 30-minute speech introducing the name change and detailing the extensive restructuring of the association's ruling council and committees.

'The restructuring of the accounting body is to ensure it has a proper investigation and disciplinary committee structure which is important to the overall corporate governance reform in Hong Kong,' Mr Best explained.

sfc mulls splitting chairs

The Securities and Futures Commission board of directors yesterday discussed a government proposal for it to have both a chairman and a chief executive. At present, it only has a chairman, Andrew Sheng, who fulfils both roles.

The proposed split will need Legco approval, but there has been a lot of market speculation about how it will be done.

One option is for Mr Sheng to remain as chairman at $6.5 million a year, while a new chief executive is appointed. This would be good news for anyone looking for a top financial job, but may be difficult for our penny-pinching legislators to approve.

On the other hand, Mr Sheng could be named chief executive, and keep his $6.5 million a year, while a non-executive chairman is appointed to function along the lines of Charles Lee Yeh-kwong's $100,000-a-year role with Hong Kong Exchanges and Clearing.

This cheaper option is more likely to get the nod from our frugal lawmakers.

teachers trade places

The Securities and Futures Commission is busy with a programme of investor education, literally.

The commission has invited secondary school teachers to visit fund houses to learn more about the industry.

On the banking side, the Financial Markets Association is also opening its doors.

It hopes to expand its membership from 500 to about 10,000 by allowing employees in the foreign-exchange settlement and risk-management departments to join their trading colleagues and sign up.

doubling up on happiness

Lawyer Janine Canham, of Dibb Lupton Alsop, went on leave a few months ago to prepare for the arrival of twins.

Now White Collar hears she has doubled her happiness with two lovely boys. All are well and back home, but we will not see her back in Central for a few months yet as she is on maternity leave until the end of March.

Lehman imports top gun

Investment bank Lehman Brothers has relocated Charles Alexander to Hong Kong, from London, as head of Asia corporate finance.