The accountancy profession might have been caught napping for much of the late 1990s, but it seems it has now woken up. If an auditor qualifies his or her opinion on a company's financial statement, it means there are disagreements or doubts about the company's accounting treatment - and we are seeing more and more of them. An informal survey found that about 10 main-board firms have had their interim or annual financial statements appended with these qualifications in the past two months. A Hong Kong Exchanges and Clearing report in August also showed that of the annual reports with year-ends in December, January and February, 36 had their auditors' opinions qualified or modified. Have Hong Kong's auditors upped their policing methods in the wake of the bursting of the bubble and the collapse of Andersen? 'Auditors may be more conservative under the current economic climate; they may ask for more evidence to ensure all financial figures are true and fair,' said David Sun Tak-kei, chairman of the Hong Kong Society of Accountant's corporate governance committee. Many auditor complaints seem to centre around the question of whether sufficient information has been given by the companies. The latest example is H share Guangdong Kelon Electrical Holdings. In a review of the company's interim financial report for the first half to June, Guangdong's auditor, Deloitte Touche Tohmatsu, and its joint-venture Deloitte Touche Tohmatsu Rong Hua, said that due to insufficient information they were unable to conclude whether the company's net assets were free from misstatement. Companies missing the exchange's deadlines could be an indication of whether or not the auditor had a problem with the financial statements, Mr Sun said. 'It is because many such delayed reports are due to disagreements or doubts between auditors and companies.' In Hong Kong, listed companies are required to announce annual results not later than four months after the financial year-end. For interim reporting, they should announce within three months of the period in question ending. An exchange report showed that as of mid-September, 18 firms had missed the deadline to report their final or interim financial results. The number was higher than the 11 in July. Qualified opinions are always found in these tardy reports. For example, it was only in August that investment holding firm Tem Fat Hing Fung (Holdings) announced both its annual results for the year ended April last year and the interim results for the six months to last October. In both reports, auditor Ting Ho Kwan & Chan qualified its opinions and questioned whether the company could continue as a going concern. But in some cases qualified opinions appeared to stem more from different perspectives about accounting treatments than real financial uncertainty. Hop Hing Holdings, for example, received a qualified opinion after its management refused to follow an accounting standard that requires firms to capitalise goodwill for its trademarks and amortise them. Through such amortisation, provisions could be made for impairment losses on goodwill. The firm said the standard was rebuttable because it presumed the useful life of intangible assets, such as trademarks, would not exceed 20 years. Some of its trademarks have existed since 1930.