Hong Kong accountants are pushing back against a proposal by China’s Ministry of Finance to diminish the role of foreign auditors in listed companies.
The ministry wants Chinese auditors to handle specific auditing work and their foreign counterparts to deal with reports but share liability.
Foreign auditors have no control over the process but they are required to sign on to it, Apple Daily reported Thursday, citing Clement Chan, president of the Hong Kong Institute of Certified Public Accountants.
Chan called the proposal unfair and said Hong Kong’s audit sector is very concerned.
Kenneth Leung, a lawmaker representing the accounting constituency, said the proposal will have a negative impact on the sector’s long-term development.
He said Hong Kong accountants will be held responsible for audits even though they will have only a small part in it.
Leung said the proposal might be related to China’s stringent rules on state secrets. The government is wary about any leaks of sensitive information, he was quoted as saying.
The move comes at a time when Alibaba, China’s biggest e-commerce company, is moving toward a listing in the United States. That means the company will need to comply with US disclosure regulations, the report said.
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