Seventy per cent of complaints about faulty audits of Hong Kong companies this year were carried out by non-Big Four accounting firms, according to the Financial Reporting Council. The council, which looks into audit failures of listed firms, received 12 complaints this year that triggered initial investigations. Among them, 70 per cent were audited by non-Big Four accounting firms. "This should not be seen as smaller audit firms having more problems, as the investigation has not ended," said Chan Tak-shing, a senior director of investigation and compliance at the council. The Securities and Futures Commission and other regulators are filing complaints to the council on an increasing number of irregularities at small to medium-sized mainland firms listed in the city. The council's chief executive, Kam Po-man, said it was also investigating media reports in relation to auditing problems. Some firms experienced financial problems shortly after listing, raising questions why auditors failed to discern the problems ahead of listing. The SFC suspended sports fabric maker Hontex International from trading in March 2010 after finding the company's prospectus overstated turnover and pretax profits in the three years leading up to the listing in late 2009. The firm only traded for 64 days. Chan said among the 12 complaints, two did not involve any problem, four cases needed more in-depth investigation and the remaining six were pending more information. Common problems that have arisen include auditors failing to question information submitted by their clients or giving a clean bill of health to problematic financial statements. Since it was set up six years ago, the council has completed 14 investigations. However, it was up to the Hong Kong Institute of Certified Public Accountants' disciplinary committee to decide on any disciplinary action, Kam said. Only one disciplinary order has so far been made by the institute - imposing a small fine on an accountant. The council was set up by the government to take over the investigative role of the institute to end the practice of accountants investigating accountants. Critics, however, said Hong Kong had lagged behind other markets with independent oversight of accountants. The institute is still responsible for licensing accountants, inspecting auditing firms and discipline. Sophia Kao, the council's chairwoman, said a consultation paper to be released next year would propose the council or an independent body carry out routine inspections "to bring Hong Kong in line with Western markets".