Big-five accounting firm Ernst & Young is seeking a judicial review to thwart an investigation by the Hong Kong Society of Accountants (HKSA) into an audit of its former client Cosco International Holdings. The company's move comes as the HKSA is attempting to investigate if the accounting house was involved in any possible malpractice or negligence while performing as auditor for the red-chip company, formerly known as Shun Shing Holdings. Ernst & Young is the second accounting firm to challenge the HKSA's investigation powers by seeking a judicial review. Last August, another top accounting house, Deloitte Touche Tohmatsu, also sought a judicial review against the HKSA, to thwart a probe by the society into the firm's audit of the insolvent red chip Guangnan Holdings. The HKSA's decision to investigate Deloitte came after KPMG - which was advising on the proposed restructuring of collapsed parent Guangdong Enterprises (Holdings) - highlighted 'alleged shortcomings' in the accounts audited by Deloitte. However, Deloitte challenged that the HKSA had no grounds for suspicion in relation to the audit, citing a litany of alleged violations by the regulatory body. The case is scheduled for further hearing later this month, according to sources. The sources said Ernst & Young's argument was quite similar to Deloitte's. An HKSA spokesman confirmed that Ernst & Young had launched a bid for a judicial review. However, she refused to comment on the investigation and the details about the review bid, saying that it would be improper for HKSA to make any comment when legal action was involved. The case is scheduled for hearing at the High Court from today until Thursday. The decision to investigate Ernst & Young followed a dispute between the stock exchange and the HKSA over auditors' professional standards and suspected malpractice in a number of cases. In late 1998, the exchange referred 11 suspected accounting malpractice cases conducted by listed companies to the HKSA for further investigation. A stock exchange spokesman refused to comment on whether Ernst & Young's involvement with Cosco was among one of the 11 cases. Ernst & Young was appointed Cosco's auditor before Cosco (Hong Kong) Group - a company controlled by state-owned enterprise China Ocean Shipping (Group) - acquired a 61 per cent interest in February 1997. It resigned subsequent to the issue of a balance sheet dated February 24, 1998, according to Cosco's 1997 annual report. PricewaterhouseCoopers was appointed by Cosco to replace Ernst & Young as the company's auditor after its resignation.