Despite winning their first major battle in the bid to limit the liability of audit firms for corporate losses, senior figures at major accounting firms said yesterday the fight is just beginning. Legislation allowing accounting firms to incorporate as limited liability companies came into force yesterday after the Secretary for Financial Services gazetted August 2 as the start date for the Professional (Amendment) Ordinance 1995 and Companies (Amendment) (No 2) Ordinance 1995. Brian Stevenson, president of the Hong Kong Society of Accountants, hailed the introduction of the limited liability option as 'one of the most significant developments for the accountancy profession in Hong Kong'. 'Now with incorporation as an option, there exists a mode of practice which affords protection for an auditor's personal assets against negligent acts of his partners,' he said. Mr Stevenson said recently that once the incorporation provisions were gazetted, the profession would be fighting for other forms of protection. These included introducing the concept of proportionate liability for auditors and the statutory capping of auditor liabilities. Martin Cheung of Price Waterhouse, said yesterday that lobbying by the accounting profession on auditor protection had 'only just begun'. 'Obviously, this is one of a number of things we were hoping for to improve the position of auditors, and we're pleased the regulations have finally been issued,' he said. He would be looking to the capping and proportionate liability options to provide relief for auditors, but it was the latter scheme which had a greater chance of success, he said. Mr Cheung did not see instant success on the lobbying front. 'In the past, Hong Kong is not known to have taken a lead on these types of matters.'
