ACCOUNTANTS welcomed the announcement that protection granted to auditors in reporting fraud and other irregularities would be extended to auditors of all listed companies. Hong Kong Society of Accountants executive director Louis Wong said it was a significant development because it would allow auditors to report fraud with greater efficiency and speed. ''Without such protection, the auditor may have to seek legal advice and make sure he is not blowing the wrong whistle,'' he said. ''Not many countries have this reporting ability so it is quite an advanced concept.'' Mr Wong said the next step was to develop the framework that auditors could follow when reporting fraud or other irregularities. He said the society had general guidelines regarding the responsibility of auditors, but without protection they could find themselves in difficult positions. Price Waterhouse's partner of technical services, Paul Winkelmann, said it was important for the legislation to spell out who was being protected. ''Whether we're protecting shareholders, creditors or the public hasn't been defined,'' he said. ''Listed companies are regulated by the SFC [Securities and Futures Commission] and the Stock Exchange, and again it's unclear which party we'd go to in appropriate circumstances.'' Mr Winkelmann said reporting fraud or other problems to a regulatory authority would be a last resort if discussions with senior management or shareholders failed to resolve the situation. KMPG partner Paul Brough said the role of auditors and protection offered to them had been an important industry issue following the financial problems affecting the Bank of Credit and Commerce International and media tycoon Robert Maxwell. He said protection for auditors was particularly important when directors, who were responsible for preventing fraud, were found to be committing it. Mr Brough said Britain's Cadbury Report, which recommended the introduction of an audit committee consisting of independent directors for all publicly listed companies, was a development Hong Kong would see as well.