1 June 2012 Dear Member and Student, Alert to Clause 399 of Companies Amendment Bill ¡V Criminal sanction on auditors In my "CE Update" of 29 May, I alerted you to clause 399 of the Companies Bill, which imposes a criminal sanction on an auditor if the auditor knowingly or recklessly omits a required statement in the audit report. As the bill is going through LegCo in its final stage, I'd like to draw your attention to the latest development:-
If the Administration's amendments are accepted and passed, this will mean that the signing partners and, among others, the audit managers and supervisors who are under the immediate authority of the signing partner in an audit engagement, may be held criminally responsible, if they knowingly or recklessly cause an omission of the required statements from the audit report without any dishonest intent. Note that the Institute wrote to the Bills Committee objecting to this clause and asking that it either be removed altogether or, at least, be amended, such that the omission would need to have been made dishonestly or with intent to defraud before a prosecution could be initiated. It seems that this will not be taken up by the Administration or the Bills Committee. If you are concerned about the implications of clause 399, as explained above, you should take the opportunity without delay to write to the Bills Committee to express your views. I attach a further copy of the Institute's recent submission on this subject, in case you wish to make reference to that. |
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Sincere regards, CPA: The Success Ingredient |