Profession's watchdog squares off again in clashes with big firms over powers
Former accountancy giant Arthur Andersen is seeking to halt an inquiry by the professional watchdog into a 1997 audit of listed stationery maker Climax International.
The legal action is another challenge to the Hong Kong Institute of Certified Public Accountants' disciplinary powers, the regulator having squared off with other firms over the scope of its authority.
Although the body formerly known as the Hong Kong Society of Accountants (HKSA) has successfully fended off the previous challenges, the status of the investigations is unknown. These include a probe into Deloitte Touche Tohmatsu's audits of materials supplier GKC Holdings and Guangnan Holdings, and a 1996 audit of Cosco International Holdings carried out by Ernst & Young.
In this case, Arthur Andersen and accountant Raymund Chao Pak-ki are seeking a judicial review of an HKSA decision to probe their conduct despite a reshuffle in the disciplinary panel during the course of the inquiry.
The watchdog formed a disciplinary committee in June 2002 to investigate a complaint by the stock exchange that the firm and Mr Chao may have been professionally negligent in relation to Climax's 1997 audit.