Accounting firm BDO stands behind competitor Ernst & Young's decision to withhold some audit-related documents from the Securities and Futures Commission on the grounds of mainland secrecy laws until a Hong Kong court has ruled on the issue.
The High Court is set to make a landmark ruling in March next year on whether Ernst & Young has to hand over audit working papers about mainland water treatment firm Standard Water to help the commission in an investigation.
Ernst &Young helped Standard Water apply for a listing in Hong Kong in 2009, but resigned as its auditor in March 2010 after finding inconsistencies in company documents.
Standard Water subsequently withdrew its listing application.
BDO chairman Albert Au Siu-cheung said many accounting firms, including his own, had more than 70 per cent of their Hong Kong staff working on the mainland, doing annual audits or auditing work to prepare companies for stock market listings.
As such, Au said, if the firm breached mainland secrecy laws, those staff would be at risk.
"How about if such a breach of secrecy law caused all my staff to be banned from going to the mainland, or what if they were detained as a result?" Au said. "I can fully understand why Ernst &Young refused to help the commission.