HK Accounting Reform Costs Likely To Be Split Three Ways

by Mary Swire, for LawAndTax-News.com, Hong Kong

16 February 2004

It emerged last week that the cost of accounting reforms may be shared between the government, the stock exchange (HKEx), the Securities and Futures Commission (SFC) and the Hong Kong Society of Accountants (HKSA).

Although plans for the creation of an independent investigation board to examine accounting scandals received broad support from the financial services and accounting sectors when they were unveiled last year, neither the government, nor the HKSA was prepared to foot the bill.

However, speaking on Thursday, Financial Services and Treasury Secretary, Frederick Ma Si-hang revealed that the government had received positive feedback from HKEx and the SFC with regard to cost sharing proposals.

"The SFC and HKEx both support the accounting reforms as they believe this will help improve market quality and corporate governance. They also reacted positively to the idea of them sharing the cost of the independent investigation board," Mr Ma was quoted by the South China Morning Post as announcing.

He added that the government would also ask the HKSA to contribute, and would consider contributing itself.

Also speaking to the SCMP, HKSA president, Roger Best announced that if asked, the Association would agree to pay a small portion of the cost of establishing the investigation board, but expressed the organisation's preference for an US-style arrangement, whereby accounting bodies contribute between 2% and 3% to the cost of running the professional oversight board.

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