Case load mounts for Financial Reporting Council

The accounting watchdog has more companies on its watch list this year, but says that does not reflect worsening accounting standards in the city.

Fifteen listed companies have been put on watch by the Financial Reporting Council, compared with 13 last year.

The council starts tracking companies when it sees media reports suggesting they may have accounting problems or when it receives complaints from other regulatory bodies or members of the public, said its new chief executive, Mark Dickens.

Dickens said that after reviewing a company's financial statements, the council determines if a full investigation is needed. Six investigations are under way at present, compared with five last year.

"This does not mean the quality of accounting or auditing in Hong Kong has got worse," he said in his first meeting with the media after retiring earlier this year as the head of the listing division of the stock exchange and taking up his position on the council last month.

Auditors came under the spotlight last year as some of their clients experienced financial problems shortly after listing, raising questions why auditors had failed to spot these in advance. There have also been instances when auditors of several newly listed companies resigned shortly after the listing.